News
July 2005
Automatic enrolment guidelines published
New guidelines regarding the regulations on how to use 'opt-out' techniques for joining workplace pension schemes have been published by the Department for Work and Pensions.
The guidelines explain one way in which employers who run Stakeholder pension or Group Personal Pension schemes can provide for their employees to become members. 'Opt-out' means employees join their scheme automatically without having to make a separate application for membership. If they don't want to join the scheme they can sign a form to 'opt-out'.
Announcing the new guidelines, Secretary of State David Blunkett said:
"We decided to issue these guidelines following discussions with industry and employers who said they were unsure if they could use 'opt-out' in workplace personal pension schemes under the law as it currently stands. Employees will be able to opt out of the scheme if they prefer, whether to make alternative provision or otherwise."
The central message of the guidance is that the most practical way to comply with current regulations is for employers to include appropriate clauses in their employees' employment contracts. These clauses are intended to comply with various aspects of the law including that relating to contracts, wages, data protection and the distance marketing of financial services.