Guidance and revised codes of practice, which aim to support automatic enrolment by helping to ensure that members of workplace pensions receive the pension contributions they are due, are published today by The Pensions Regulator.
The documents set out:
- Guidance for employers who have primary responsibility for ensuring the correct level of contribution is paid to schemes on time. This explains how employers can meet their duty to calculate the correct pension contribution
- Codes and supporting guidance for trustees and pension providers setting out how they should meet their obligations to monitor the payment of contributions due to be paid, provide information to members, and report material payment failures to both the regulator and scheme members.
They build on current good practice and existing legal duties, as well as focusing on establishing clear accountabilities for achieving good outcomes for members.
Go to maintaining contributions to read the draft codes and consultation response.
Charles Counsell, executive director for automatic enrolment, said:
'With automatic enrolment creating millions of new pension savers, it’s more important than ever that employer and pension scheme systems are administered to support good outcomes for members.
The risk of incorrect payments will increase as tens of thousands of new employers without experience of workplace pensions enter the market. Employers, providers, the regulator and members themselves all have a role to play in the protection of member savings.
Pension schemes should have in place a monitoring system that should be proportionate and risk-based. This process will help to ensure the correct flow of the right amount of money into members’ pension pots.
By working together, employers, providers, members and the regulator, can help make automatic enrolment a success.'
The development and publication of these documents is part of the regulator’s ongoing work with industry to ensure all defined contribution schemes meet a suitable quality standard.
The new quick guide to paying contributions provides clear information for employers on their responsibility to pay the correct level of contributions into their pension scheme on time. This includes information on how to calculate, deduct and pay contributions. Go to contributions and funding to view the quick guide.
The regulator consulted on the codes of practice on reporting late payment of contributions last year and received responses from pension providers, pension trustees, lawyers, trade bodies and pensions consultancies.
All respondents acknowledged that with the advent of automatic enrolment a fundamental reshaping of the pensions landscape is taking place. This change will bring new challenges for providers, employers, workers and the regulator; in particular as large volumes of smaller employers begin to stage.
The draft codes of practice and supporting guidance address comments made in response to the consultation. For example, clarification of the duty on trustees and managers to monitor contributions due to the scheme and in particular, that an effective monitoring system should be proportionate and risk-based.
The regulator will take a phased approach to both the implementation of an online reporting portal and standardised reporting.
The draft codes of practice have been laid before Parliament and the Northern Ireland Assembly. After the process is completed, these codes are expected to come into force in autumn 2013.
|
