Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • July 2012
07

Government opts for 'pension pot-follows-member'

Open-access content Tuesday 17th July 2012 — updated 5.13pm, Wednesday 29th April 2020

The Department for Work and Pensions has decided to implement a system where workplace pension pots follow savers as they change jobs.

2

The approach aims to address the 4.7 million additional small pension pots expected to be created by auto-enrolment and an increasingly mobile jobs market.

In a written statement laid before the House of Commons this morning, pensions minister Steve Webb said that reducing the number of small dormant pension pots in the system would make it easier for people to keep track of their savings.

It would also reduce administrative burdens for pension providers, supporting low-cost pension provision.

The DWP issued a consultation in December seeking views on the approach it should take to the small pots issue. It estimates around 50 million dormant pension pots could be created by 2050 if no changes are made to the current transfers system.

'This could significantly undermine the government's commitment to encourage pension saving if people lose track of their pots, and so miss out on valuable retirement income,' Mr Webb said today.

As well as pot-follows-member, the other options under consideration were to improve the current system, which relies on scheme members initiating transfers, or alternatively the automatic aggregation of small pots into one or more aggregator schemes so that all pots are stored in one place.

Mr Webb said: 'The vast majority of our respondents agreed that an automated transfer system is the best way forward. Creating a system in which small pots follow people through employment is the preferred approach among savers, according to a recent survey by the Association of British Insurers.

'The government's analysis indicates that this option will achieve the most consolidation and generate the most administrative savings in the long run.'

Full details of how the pot-follows-member approach will work are expected to be set out in the department's response to that consultation, which the minister said would be published today.

Mr Webb added that the DWP would now carry out 'essential work' with interested parties to firm up the policy and design a strategy for implementing it.

This article appeared in our July 2012 issue of The Actuary .
Click here to view this issue

You may also be interested in...

Plans for state pension reform delayed until autumn

Proposals to introduce a single state pension and automatically link the state pension age to increases in longevity will now be published in the autumn, pensions minister Steve Webb revealed today.
Thursday 12th July 2012
Open-access content
2

Car insurance prices 'have dropped 7.1% over the last year'

Car insurance prices fell by 7.1% over the 12 months to the end of June as a result of high competition between insurance providers, according to research published by Towers Watson and Confused.com.
Monday 16th July 2012
Open-access content
2

Convergence call for insurance accounting standards

Insurers across the globe have called for a single accounting framework to enable increased transparency and more effective company comparisons.
Monday 16th July 2012
Open-access content
ta filler

Householders 'are being denied flood insurance'

Householders are being denied flood insurance cover or quoted hugely inflated prices because of delays by the government and insurers in reaching a new deal on affordable cover, the Local Government Association said today.
Thursday 19th July 2012
Open-access content

Insurers 'not engaging with asset managers on Solvency II'

A significant proportion of insurance companies are yet to engage with their asset managers about how Solvency II will impact on their business and could end up out of pocket as a result, Ernst & Young said this week.
Friday 13th July 2012
Open-access content
2

Care white paper first step to reform, says the Profession

The social care white paper and draft Care and Support Bill published today by the government are a ‘first practical step’ to much-needed reform of the long-term care system, according to the Institute and Faculty of Actuaries.
Wednesday 11th July 2012
Open-access content

Latest from Pensions

ers

By halves

Reducing the pensions gap between men and women is a work in progress – and there’s still a long way to go, with women retiring on 50% less than men, says Alexandra Miles
Thursday 2nd March 2023
Open-access content
rdth

Make My Money Matter's Tony Burdon on the practical power of sustainable pensions

Years working in international development showed Tony Burdon, head of Make My Money Matter, that sustainable pensions can harness trillions of pounds to build a better world – at a scale governments and charities can’t. He talks to Travis Elsum
Wednesday 1st March 2023
Open-access content
KV

Liability-driven investments: new landscape

What now for liability-driven investments, after last year’s crash in the market? Pensions experts Rakesh Girdharlal and Moiz Khan say it should lead to a more balanced approach
Wednesday 1st February 2023
Open-access content

Latest from July 2012

2

CEO's comment: Racing start for public affairs

Derek Cribb explains how reinvigorating research offers the key to thought leadership
Wednesday 3rd October 2012
Open-access content
2

CEO's comment: Going for a global gold

Derek Cribb explains why education is key to a universally successful future for the Profession
Friday 3rd August 2012
Open-access content
2

President's comment: A blooming vision

Having watched the seeds being planted, Philip Scott now wants to see the actuarial profession blossom and grow
Thursday 2nd August 2012
Open-access content

Latest from formbuilder_item_removed

2

Implementing IFRS 17 Discount Curves: Theoretical and Practical Challenges

The International Financial Reporting Standard (IFRS) 17 requires liability cash flows to be discounted at rates that reflect the characteristics of the cash flows, including their liquidity
Tuesday 3rd September 2019
Open-access content
2

Profit Emergence Under IFRS 9 and IFRS 17: The impact of choice of liability discount rate

With the IFRS 17 accounting standard, insurers need to understand the patterns of profit emergence that arise under the standard, and how current business and methodology decisions affect such patterns.
Wednesday 10th July 2019
Open-access content
2

Whitepaper: Aggregation and diversification of the IFRS 17 Risk Adjustment

This paper forms part of a series of high-level papers designed to provide an introduction to different features of the risk adjustment that should be considered in advance of implementation.
Tuesday 29th January 2019
Open-access content

Latest from 07

Insurers 'need better Solvency II know-how at board level'

Insurance companies have been urged to do more to educate their boards about Solvency II after KPMG research found that only one in five boards have received more than 15 hours training on the new European rules.
Thursday 26th July 2012
Open-access content
ta filler

Over half of European firms 'ill-equipped for terrorist threat'

More than half of European companies feel underprepared to deal with the threat of terrorism and political violence, according to research published yesterday by Ace European Group.
Wednesday 25th July 2012
Open-access content
2

Government unveils £300m mesothelioma support scheme

A £300m support scheme for people who develop mesothelioma after being exposed to asbestos at work but are unable to claim compensation because they cannot trace a liable employer or insurer has been announced by the Department for Work and Pensions.
Wednesday 25th July 2012
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Pricing Trading Manager - Contract

£700 - £1000 per day
Reference
148579

Head of Financial Risk

Flexible / hybrid working with minimum 2 days p/w office-based
£ excellent package
Reference
148578

Insurance Risk Leader

Flexible / hybrid with 2 days p/w office-based
£ to attract the best
Reference
148577
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ