7 days
7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.
In this 7 Days
- Regulations banning flat fees for de minimis pension pots in default arrangements published
- Private member’s bill expanding auto-enrolment regime put forward in Parliament
Regulations banning flat fees for de minimis pension pots in default arrangements published
On 10 January 2022, regulations introducing changes designed to protect small pension pots from being eroded by flat fee charges were laid before Parliament (see 7 Days). The regulations come into force on 6 April 2022 and:
- will prohibit an annual flat fee from being charged to members with rights in the default arrangement of an occupational pension scheme used for auto-enrolment where that fee would reduce the value of those rights to less than £100
- where more than one flat fee charge is imposed in respect of a member in a single charges year, will require the scheme trustees or managers to restore the member’s rights under the default arrangement to the position they would have been in if only one such charge had been imposed.
Alongside the regulations, the Government is also due publish a revised version of The charge cap: guidance for trustees and managers of occupational schemes. This revised guidance will describe how the de minimis will operate and set out examples.
Private member’s bill expanding auto-enrolment regime put forward in Parliament
On 5 January 2022, a Private Member’s Bill seeking to extend auto-enrolment to all jobholders aged at least 18 and to remove the lower qualifying earnings threshold, was introduced to Parliament and is set to have its second reading on 25 February.
A report by thinktank “Onward”, also published on 5 January, suggests that lowering the auto-enrolment age and earnings threshold by 2026 could create additional pensions savings as high as £2.77 trillion across the working lifetime of the current workforce.
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