Two-thirds of UK companies believe at least 20% of their staff will opt out of pensions, when they are auto-enrolled from next year.

Research from the Tax Incentivised Savings Assocation (Tisa) published in June shows employers cite the affordability of saving as the main reason for people leaving schemes.

There will be no big government advertising campaign for the National Employment Savings Trust (Nest) or auto-enrolment in 2012.

The government has a statutory duty to communicate the changes, but it is hampered by a cutback on PR and advertising activity, while Nest has said it will only communicate with employers, their advisers and its members through paper and online-based communications.

A tax anomaly will start to hit millions more UK savers under the new annual allowance regime, the government has confirmed.

Employees will get coloured badges and targets to better communicate how healthy their retirement savings are, under plans dreamt up by pensions minister Steve Webb.

The system, themed to tie in with the London Olympics in 2012, could also apply to denote the quality of employers’ pension schemes. Webb likened them to the Duke of Edinburgh awards, which have the same bronze, silver and gold levels of achievement.

Shadow pensions minister Rachel Reeves told Steve Webb her own mother would suffer under his state pension reforms, in an impassioned debate in the House of Commons last month.

Reeves told the House 2.6 million women and 2.3 million men will have to wait longer for their state pension under the accelerated plans to raise the state pension age (SPA), including her own mother.

Research by JLT and the Pensions Management Institute (PMI) found 14% of pension schemes had quantified the cost of auto-enrolment.

More than two-thirds of employers and trustees have failed to prepare for the National Employment Savings Trust (Nest) and auto-enrolment, a survey by Punter Southall has found.

It was standing room only, with over 40 delegates turned away, as public sector pension fund managers discussed how best to communicate the coming reforms to their members.

Public sector pension fund managers strongly questioned one of Lord Hutton’s policy leaders over the wide-sweeping reforms, a conference heard.

The government’s proposal to allow early access to pension savers’ tax-free lump sum has been greeted with mixed reviews.

Public sector schemes will have to find £7.5bn by 2015 through raising contributions or cutting benefits, on the back of Lord Hutton’s recommendations.

Lord McFall has set out the goals for his Workplace Retirement Income Commission (WRIC) – coverage, simplicity and investment return.

Speaking at the National Association of Pension Funds’ (NAPF) Investment Conference 2011, McFall told delegates auto-enrolment “isn’t the end of the road”, and he wanted to move away from a “stop and start” approach to pension reform.

National Employment Savings Trust (Nest) Corporation chief executive Tim Jones has said the scheme will investigate sharing additional data with employers, if there is demand from members.

Under Nest’s current data protection policy, the employer will only be able to access information they have already provided to Nest.

If an employee already enrolled in Nest moves to a new employer, Nest will not share data from the first employer with the second.

Lindsay Tomlinson championed UK corporate governance as the best in the world, at the National Association of Pension Funds (NAPF) investment conference.

Speaking during a debate on the Financial Reporting Council’s (FRC) stewardship code, NAPF chairman Tomlinson said pension funds should be proud of the work carried out so far.

“UK corporate governance is the best in the world, and we deserve credit for that. Companies are now radically different from where they were 20 years ago,” he said.

Lord McFall has set out the goals for his Workplace Retirement Income Commission (WRIC) - coverage, simplicity and investment return - and said he would be touring the country to speak to students and school pupils to drive pension engagement.

Cash balance

Lord Hutton has privately indicated he is leaning towards a cash balance scheme to his public sector pension reform mandate, despite strenuous opposition.

Savings committee

Lord McFall, veteran chairman of the Treasury select committee, will chair a commission to find ways of radically changing the UK’s approach to saving.

PPI report

Lord Hutton has failed to appreciate prior reform to public sector pension provisions, according to the Pensions Policy Institute’s (PPI) research director.

Taking public sector workers out of final salary arrangements could be simplified by closing to new members as a first step, international experience shows.

The Australian government has moved to defined contribution (DC) for all its state schemes bar two, but was constitutionally obliged to maintain the defined benefit (DB) setup for anyone already enrolled, without reducing their benefits.

A new paper from the Centre for Policy Studies will call on the government to force enrolment into the National Employment Savings Trust (Nest) for all public sector workers.

Speaking ahead of the paper’s publication, author Michael Johnson, former investment banker and actuary, said he was calling on the government to accept one of his two frameworks to solve the public sector pension funding crisis.

Local authorities face being forced to set up independent trustee boards in the forthcoming Hutton report.

The peer, charged with proposing reform of the public sector pensions landscape, told a delegation in January he is considering a recommendation that council funds be brought in line with European scheme governance rules.

Tim Jones has defended the hiring of National Employment Savings Trust (Nest) fund administrator State Street after an error forced it to pay $11.7m (£7.3m) to a major US public fund client.

The National Employment Savings Trust (Nest) has unveiled a charging structure for members that will compete with all but the largest occupational pension schemes in value for money.

The Department for Work and Pensions (DWP) is set to announce flexibilities to the auto-enrolment rules that will make it easier for employers to certify and maintain existing money purchase schemes.

Key concessions surrounding the certification of existing schemes were to be announced at the time of going to press. These include the use of a formula to allow schemes operating under basic pay premises to satisfy auto-enrolment rules, which require calculations based on full pay.

The state pension age, Equitable Life annuitants, auto-enrolment and the public service pension were all affected by George Osborne’s spending review last month.

Leaders in the pension industry have slammed the prospect of giving scheme members early access to pension lump sums.

The Treasury is poised to abolish tax relief above 20% on pension contributions, a think-tank with close ties to government has claimed.

Michael Johnson, research fellow at the Centre for Policy Studies (CPS), told the FT’s UK Leadership of Pensions Summit the move would take place “pretty soon” in a bid to save around £7bn a year.

The change would be matched by a cap of 20% on the tax paid on pensions in payment.

Pensions minister Steve Webb has given one of his clearest indications that he will prioritise state pension change over other reforms in the coming months.

Angela Eagle has criticised the coalition government’s fast-paced review programme, for increasing the cynicism felt among the general population towards pensions.

The former pensions minister told an event at the Labour Party’s annual conference in Manchester the move to switch public and private sector pension inflation protection from the retail price index (RPI) to the consumer price index (CPI) was corrosive for pension savings.

“Though it might take some pressure off pension funds and the public sector, I think it is really corrosive in terms of the pension promises people are getting. And the effect will only worsen over time,” she said. “I’m really wary of that.”

Angela Eagle has revealed she researched a form of foundation pension while in office but decided it would be too expensive and complex to implement.

The Conservatives have provided their strongest hint yet they will back Steve Webb in his plans to boost the basic state pension.

During a Smith Institute debate at the Conservative Party conference, Oliver Heald, Tory MP and member of the work and pensions select committee, told the audience: “I believe the basic state pension is the key to understanding your pension position.

“If people knew how much they’d receive from the state pension and second state pension, people could then work out how much extra they’d need to save.”

The government should make the National Employment Savings Trust (Nest) a sovereign wealth fund, enforce public sector participation and pay the initial 2% fee and annual management charges, according to an academic.

Michael Johnson, author of Don’t let this crisis go to waste, made the suggestion during a Pensions Management roundtable debate (see pages 36-43).

“Essentially, over a relatively short timeframe, we build up an enormous with-profits fund in a number of silos,” he suggested.

Johnson then raised the question over who makes the decisions about asset allocation would rest with all the private sector contractors managing the assets, since it would be unfair to leave it with the employee due to their lack of education.

Aegon Benefit Solutions has stopped taking on new business, becoming an early casualty of the company’s plan to cut operating costs by 25%, which is currently under review.

The Department for Work and Pensions (DWP) has more than halved this year’s budget for implementing the National Employment Savings Trust (Nest).

The government's latest plans of abolishing the default retirement age (DRA) from 2011 have received a mixed reaction. We have welcomed the changes, but have above all made it clear that we believe there are some issues around abolishing the DRA that need to be fully considered.

A white paper with heavyweight political backing is calling for auto-enrolment rules to extend to corporate ISAs.
Michael Johnson, former secretary to the Conservative Party’s economic competitiveness policy group, published his report Simplification is the key in June.
The report recommended the government introduce a combined ISA and pensions annual savings contribution limit of £45,000, with a maximum of £35,000 for pensions.

Michael Johnson’s pioneering report, calling for ISAs to be included in the upcoming
auto-enrolment provisions, has received industry-wide support.
And a spokesperson for the Department for Work and Pensions has admitted Johnson’s theme of simplification is an important part of the government’s pensions agenda.
“We are committed to reinvigorating private pensions and welcome contributions to the debate, including on the issue of encouraging savings,” he said.

The Treasury is winning its long-running battle to dramatically roll back the 2012
pension reform programme.
Civil servants at the exchequer have opposed elements of the Department for Work
and Pensions’ (DWP) flagship project on cost grounds for some time. But the new
government’s relatively cool attitude to the National Employee Savings Trust (Nest) has given their argument impetus.
It is understood that the likely outcome of the proposed review of Nest is it will be postponed indefinitely. And auto-enrolment will be initially limited to employers with existing defined contribution arrangements.

Cash or financial advice are the most popular alternatives for high earners faced by a cut in tax relief from April next year.

The Confederation of British Industry (CBI) has attacked the 2% initial charge to be levied by the Nest Corporation as a “raw deal” for savers and would encourage employees to opt out of the scheme.

The Confederation of British Industry (CBI) has called for an overhaul of “unsustainable” public sector pensions and suggested a notional defined contribution (NDC) model.

The possibility of the general election resulting in a hung parliament could have a bearing on any number of pension issues and delay the process of passing legislation.

The government’s publication of the charging structure for the National Employment Savings Trust (Nest) has provoked murmurs of discontent from industry commentators.

The government has blocked its new National Employee Savings Trust (Nest) administrator from signing a long-term deal until political uncertainty over the programme is settled.

The Personal Accounts Delivery Authority (PADA) has confirmed that Tata Consultancy Services is to take on the administration of the National Employment Savings Trust (Nest).

Shadow pensions minister Nigel Waterson has promised an immediate review of the Personal Accounts Delivery Authority (PADA), should his party win this year’s general election.

The Department for Work and Pensions (DWP) last month published the final set of regulations putting in place the pensions policy reforms ahead of implementation in 2012.

Small businesses have branded 2012 pension reforms “unfair”, according to research published with the government’s final consultation response on the subject.

Steve Bee’s new role at Paradigm Partners will involve encouraging employers and advisers to create defined contribution schemes that are superior to the National Employment Savings Trust (Nest) scheme.

The Personal Accounts Delivery Authority (PADA) has given a new name to the personal accounts project.

Logica’s withdrawal from the Personal Accounts Delivery Authority’s (PADA) administration procurement process has raised questions over whether there is sufficient competition for the role.

Pensions minister Angela Eagle has dismissed Conservative proposals to support defined benefit (DB) schemes and bring forward auto-enrolment.

Logica's withdrawal from the Personal Accounts Delivery Authority's (PADA) procurement process has raised questions over whether there is sufficient competition for the role.

ATP’s departure from personal accounts admin contract bid proves the system is working like clockwork, states PADA’s chief executive

Pensions experts have called for politicians to take more radical steps in state pension provision following the party conference season.

Conservative shadow pensions minister Nigel Waterson has spoken about his own views on public sector pensions, including repeating his desire to close unfunded schemes.

More than two-thirds of Britain’s smallest companies fear that the 2012 pension reforms threaten closure or redundancies, Federation of Small Businesses (FSB) figures show.

Raising the state pension age dramatically could leave older workers in limbo with little or no income, according to the Trades Union Congress (TUC).

The Trades Union Congress (TUC) has challenged the idea that the public sector pension system in its current form is unsustainable.

The government’s pensions policies are fundamentally flawed and should be abandoned in favour of a new and sustainable system, a report published by the Centre for Policy Studies (CPS) has claimed.

David Cameron has pledged to close the MPs’ pension scheme following a Conservative election victory, adding that politicians need to lead by example when reforming the public sector.

The government’s latest report into auto-enrolment could require schemes to rewrite rules regarding new member investment, according to a law firm.

Low earners could lose out on potential savings when auto-enrolment is introduced in 2012, according to several industry experts.

The administration for personal accounts may be run by a company based in North America or Europe.