Defined Contribution  

Pensions minister rules out 'pot follows member'

Pensions minister rules out 'pot follows member'

The minister for pensions and financial inclusion, Guy Opperman, has dismissed the introduction of a 'pot follows member' system as the government focuses on the roll-out of auto-enrolment.

In a written answer published on Monday (16 April) to a parliamentary question submitted by Conservative MP Royston Smith, Mr Opperman said now isn't "the right time to implement automatic transfers".

He said: "The government's priority for private pension savers in 2018 remains the successful roll-out of automatic enrolment. Industry shares this priority.

"With 94 per cent of eligible jobholders automatically enrolled in an occupational defined contribution [DC] scheme enrolled in a master trust, scheme managers and trustees are focused on preparing for compliance with the authorisation and supervision regime introduced by the Pension Schemes Act 2017.

"These reforms increase the number of people saving into workplace pensions and ensure confidence in the system.

"Government, providers, employers and members should focus on these changes."

There are now more than nine million people auto-enrolled in a workplace pension scheme, according to figures from The Pensions Regulator.

Pot-follows-member was a system launched by former pensions minister Sir Steve Webb to allow a saver's auto-enrolment pension to follow them from job to job, and was due to come into effect in 2016.

However, in October 2015, Baroness Ros Altmann, his successor as pensions minister, halted the process of introducing the system to allow auto-enrolment to be completed.

Mr Opperman added that individuals with a defined contribution pension pot "have a statutory right to transfer to another pension scheme of their choice" and can use the Department for Work & Pensions (DWP) pension tracing service to "identify pension pots they have accumulated with former employers".

He said: "Members could also benefit from the introduction of the pensions dashboard, which should make it easier to see all their pots in one place when they choose to do so. This would enable them to feel in control and take ownership of their pensions.

"We are currently conducting a feasibility study and aim to publish our findings later in spring 2018."

The plan behind the pension dashboard, which is due to be launched in 2019, is to create the technology to enable savers to see all of their retirement pots in one place at the same time, giving them a greater awareness of their assets and how to plan for their retirement.

The DWP was originally aiming to present its feasibility study on the dashboard at the end of March.