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Adviser  >  Technical Central  >  OPS Matters  >  Personal Accounts - DWP response to the consultation

Personal Accounts - DWP response to the consultation

The Department for Work & Pensions (DWP) published its White Paper in December 2006, Personal Accounts : A new way to save. A period of consultation followed which, ended on 20 March 2007 with the DWP publishing its response on 14 June 2007.

The White Paper proposals remain largely unchanged following the consultation. However, Personal Accounts, importantly, will be trust based with a board of trustees. Trustees are to be advised by a members' panel and an employers' panel. In addition, there will be a contribution ceiling initially set at £3,600 per annum rather £5,000 per annum as originally stated in the White Paper.

Going forward

Now that the period of consultation is over, the DWP will be focusing on the creation of the Personal Accounts Delivery Authority (PADA) with the following as key principles:

  • simplicity - Personal Accounts must simplify the decisions people are asked to make and provide an easy way to save;
  • independence - Personal Accounts will be delivered using private sector expertise independent of outside pressures;
  • working for members - building a Personal Account scheme which commands the confidence of its members and is designed with their needs at its heart;
  • minimising the burden on employers - ensuring that the impact on employers is considered at each stage of development; and
  • supporting good existing provision - focusing Personal Accounts on those without access to workplace schemes.

Decision making

An interesting point is that the Government will defer all decision making for Personal Accounts to PADA who will "draw on private sector expertise and experience". The Government plans to extend PADA’s remit and charge them with executive powers to:

  • have clear objectives to deliver the infrastructure for the Personal Accounts scheme and automatic enrolment;

  • be tasked with delivering a scheme that will meet members' interests with low charges, appropriate investment choices and a panel for prospective members;

  • be required to deliver the scheme in a way that minimises the burden on employers and supports existing provision; and

  • act in a consultative and open manner - the development of Personal Accounts has been characterised by its emphasis on consultation and this will continue under the Delivery Authority.

What now?

Personal Accounts won’t make an appearance until 2012 so until PADA receives its powers it will very much be a case of what this space.

                                                                                                         

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