Written Evidence to be reported to the House.
Pensions Bill
4:30 pm
Mr. O'Brien: In answer to the first question, we do not know the impact that primary legislation may have on the various structures of shared risk which Ian Farr has identified. Others have different schemes from those which the ACA has proposed, and we have already heard some evidence about the various schemes. Therefore, we would not, by means of a power in the Bill coupled with regulations, be able to deal with all the problems that we probably would have to deal with if we were to move towards shared risk—a new, middle way of shared risk.
The issue is not just about statute, but about case law, which can be complex. There can be specific and detailed issues about the way in which a pension scheme operates, and although regulation might well provide for some ability to overrule it, regulation would not necessarily be firm enough. On pension funds, and particularly on trust law, we are talking about complex and detailed case law that requires a lot of examination. The lawyers who advise me, and myself as a lawyer, are very cautious about saying that we can undertake such work.
On the second question, about whether there should be auto-enrolment for the self-employed, who would auto-enrol them? They would only have to auto-enrol themselves, in which case they would be opting in. Would you say that everyone who is self-employed was obliged suddenly to join a pension scheme and then opt out? It would be somewhat burdensome for every window cleaner and small, self-employed business if they had to do that, particularly if they were setting up their business for a short period.
We would provide the opportunity and probably the encouragement for the self-employed to get involved, not particularly in personal accounts, although they are there if they wish, but in saving for their future and for a pension. Not enough self-employed do so. It would not be advisable to auto-enrol them and create an administrative hoop for them if they were running a small, temporary business.