Early this week, the FT Adviser reported that the government has confirmed the auto-enrolment commission ban on occupational schemes, and the new arrangements will come into force from April 2016.
In a document published by the Department for Work & Pensions, the government stated the ban relates to ‘advice or a service’. The DWP added that there may be things that the service provider provides which do not fall within that term.
This new commission ban will apply to all qualifying auto-enrolment schemes and will be monitored by The Pensions Regulator.
Our Financial Planning Consultant, Chloe Mason, comments on the news:
“I think it is the correct decision to ban commission on auto enrolment pension schemes from April 2016. At Sedulo, we have an all-encompassing & low cost proposition whereby the employer is paying for the whole project including advice and implementation of their work place pension. This is aimed at satisfying their statutory employer obligations and so why should this be funded by the employees?”
“If any employee wants more specific advice, such as ‘should I consolidate my other pensions?’, then we are happy to engage them individually so that they are in control of whether, or not, they pay for advice.”