Auto-enrolment gets EU thumbs up

Automatic enrolment will be extended to insurance-based workplace pensions from 2012, secretary of state for work and pensions James Purnell announced last month.

The Government is now amending the Pensions Bill 2007 to allow automatic enrolment into workplace personal pensions, after receiving confirmation that this was consistent with EU law.

The Bill already allows for automatic enrolment into trust-based pension schemes, but the Government wanted to confirm that automatic enrolment into contract-based schemes would be consistent with European consumer protection directives.

The European Commission provided confirmation last month that the Distance Marketing Directive and the Unfair Commercial Practices Directive will not prevent workplace pensions from auto-enroling staff into schemes.

Secretary of State James Purnell said: “At present around and#163;6.7 billion is saved into workplace personal pensions annually by some three million employees, making it the second largest form of private sector pension membership in the UK.

“There are currently 4.7m people who work for a company with a workplace personal pension and are not members. This announcement will extend the benefits of automatic enrolment to millions more people – giving them the means to save for their retirement for the first time.”

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