Written Evidence to be reported to the House.
Pensions Bill
2:45 pm
Lord Turner: There are two points there. First, many small and medium enterprises do not want to be and will not be involved in the job of advising on pension provision. They quite rightly recognise that they have no particular competence to do that; they do not want the liability and they want someone else to organise them. Their attitude to pensions is that with the Pensions Bill they will have to make a 3 per cent. contribution—hopefully more—but that is it, it is not for them to administer it. In a sense that is sensible. What that means is that one of the key jobs of PADA is to design a system which, in terms of the way in which the paperwork flows and the money flows, is as simple as possible for small and medium enterprises.
I am sure that one of the key concerns is “Is this thing going to be administratively simple enough to work?”. I would be surprised if you had not heard that if you have listened to the Federation of Small Businesses and others. We believe that it can be made administratively simple, provided there is a clearly defined set of processes. But the core will have to be that the flow of any generic advice will be directly from the pension provider—in many cases the national scheme pension provider—to the individual. It will not typically flow through the employer because it is simply something that they do not want to be involved in, and they know that they have no particular competence to be involved in it.