date: 15 December 2011
embargo: For immediate release
Responding to DWP announcement today (Thursday) on small pots, short service refunds and earnings thresholds for the auto-enrolment regime TUC Head of Campaigns Nigel Stanley said:
'We welcome Steve Webb's determination to end short service refunds. These not only undermine the auto-enrolment regime, but come pretty close to any common-sense definition of theft.
'Contributions paid by the employer into a worker's pension retirement pot should belong to the worker, not be subject to a grab back by their boss if they happen to leave.
'The government is right to link short service refunds to a comprehensive solution to the small pot issue. We will argue strongly in the consultation that the interests of the pension saver should be paramount. That requires a default option that can guarantee low charges and sensible default funds.
'The TUC will press strongly for thresholds within the auto-enrolment regime to be linked to inflation, not changes in tax or national insurance bands.
'We know that the government's intention is to lift the starting rate for income tax so that a growing proportion of the low-paid do not have to pay income tax. But it would be a perverse consequence if this also excludes people - the vast majority of whom will be women working part-time - from the right to receive an employer pension contribution.'
NOTES TO EDITORS:
- All TUC press releases can be found at www.tuc.org.uk
Issued: 15 December, 2011