UK opposition ramps up pressure on government over DC charge cap delay

first_imgThe amendment, put forward by Lord Browne and Baronness Drake, both Labour peers, and Lord Turner, a cross-bencher and former chair of the Pensions Commission, compels ministers to lay regulations restricting charges before Parliament before the end of April 2015.This follows recent statements from the shadow government, which called on prime minister David Cameron to ensure the charge cap was implemented, to protect savers.The sudden ramp-up in pressure over charges in auto-enrolment schemes comes after the current pensions minister, Steve Webb, announced a postponement of the cap by one year.Originally, the government began consulting on capping charges in late 2013, with expected implementation of a cap – of between 75 and 100 basis points – by April 2014.However, the minister admitted the cap was too complex, and that enforcing it from April would be unfair to those currently going through auto-enrolment.In response to this, opposition party members berated the government, accusing it of bowing to lobbying by the insurance industry.Labour pensions spokesmen Gregg McClymont said the move was characteristic of the government, and questioned its commitment to implementing a cap in the future.Minister Steve Webb has consistently denied cancelling the cap altogether, and said one would be implemented by April 2015 at the latest.However, with political parties gearing up for a general election in May 2015, doubts remain over how much the Department for Work & Pensions can get through Parliament before it is dismissed.It is unclear whether the amendment will remain in the Bill before its ascent into law by the summer.The coalition government also control the second chamber, meaning the amendment could get voted down before its final publication.In addition to the political debate, analysis from the government showed current charges within DC schemes are higher than previous estimates, with some falling above proposed capped levels. Members of the UK opposition party have increased pressure on the government after it postponed the implementation of a cap on charges, by tabling amendments to pensions legislation passing through Parliament.The Pensions Bill, which is currently passing through the UK House of Lords, Parliament’s second chamber, is expected to become law by the summer.Within it lies the legislative perimeter allowing the government to impose a cap on charges for defined contribution (DC) auto-enrolment schemes.However, after the government backed down on imposing a cap by April 2014, the opposition party, which has long supported a cap on charges, tabled an amendment forcing action by ministers.last_img read more