Workplace Pension Opt-Outs 'Will be Banned'

Britain's bosses will be banned from attempting to force savers out of workplace pensions schemes, the government has indicated.

Pensions minister Mike O'Brien said today that so-called "inducements" offered to workers who agree to stop contributions to the company pension plans, such as cash bonuses, will now be outlawed as part of the new Pensions Bill. The ban would be enforced in 2012, to coincide with the introduction of the new automatic enrolment Personal Accounts schemes.

Some employers are keen to encourage workers to opt out of the schemes, as under the terms of workplace savings plans they are obliged to match workers' contributions. Therefore, increased numbers of opt outs leads to more money being saved by the employer.

Unveiling the plans, Mr O'Brien commented: "Decisions on whether or not to save in a workplace pension need to be taken free of any unfair pressure. That's why we want to prevent employers from trying to pressurise staff or tempt them with 'live for today' inducements into opting out of pension saving.

"Whilst it may seem attractive in the short term to accept an inducement to opt out, when people reach retirement with a lower pension, they're likely to regret taking the easy option."

The law change is to be enforced by the Pensions Regulator.