Proposed changes to the Pensions Bill mean encouraging or forcing workers not to save in a workplace pension would become unlawful, ministers have been told.
The Department for Work and Pensions wants to amend the current Bill during the Lords stages to prevent employers from offering "inducements" which encourage workers to opt out. These inducements can include perks such as higher salaries or one-off bonuses, Minister for Pensions Reform Mike O'Brien said.
The amendment will also cover circumstances where employers simply try to force their workers to opt out, leaving individuals free to decide if they want to be a member of a workplace pension scheme. The ban would come into effect with the introduction of auto-enrolment from 2012.
"It is very important that people are allowed to meet their retirement expectations by building up the savings they need" Mr O'Brien said. "Decisions on whether or not to save in a workplace pension need to be taken free of any unfair pressure. That's why we want to prevent employers from trying to pressurise staff or tempt them with 'live for today' inducements into opting out of pension saving.
The Pensions Bill requires automatic enrolment into a qualifying workplace scheme for all workers aged between 22 and State Pension age earning more than £5,035 a year in 2006/07, when the terms of the Bill were set. Where workers remain in a money purchase scheme, employers would contribute a minimum of 3% of qualifying earnings, with total contributions of 8% made up through member contributions including Government tax relief.
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