Jobholder’s right to opt in

I beg to move Government amendment No. 120, in clause 6, page 4, line 6, leave out subsection (4).

With this it will be convenient to discuss the following amendments: No. 70, in clause 6, page 4, line 12, at end insert—

‘(5A) The regulations must provide for the notice—

(a) to include information about the effect in relation to jobholders of giving notice under this section, and

(b) to be signed by the jobholder’.

Government amendment No. 122

Government amendment No. 120 removes the restriction on jobholders that prevents them from opting in more than once every 12 months. Government  amendment No. 122 enables the jobholder to request access at any time to workplace pension saving with an employer contribution, but does not oblige the employer to act on more than one request every 12 months. Should the employer choose to accept an additional notice made within that period, he must enrol the jobholder in accordance with the prescribed opt-in enrolment process. This means that employees cannot be disruptive by playing hokey-cokey with the pensions system, opting in and opting out.

If someone has opted out, that person is entitled to opt back in at some point during the year. However, as the employer need not accede to an opt-in request more than once during the year, the employee can make such requests, but the employer does not have to act upon them more than once. This will work as follows. Once a year, the employer will accept employees opting in and, at that date, will opt in those who have requested to opt in. This is a fairly straightforward process, and the amendments clarify the situation in respect of the way in which employers would be able to operate.

Amendment No. 70 seeks to prescribe the process by which a jobholder is able to trigger an opt-in, and obliges notice to be given in a particular form, signed by the jobholder, with particular information being provided. My reason for opposing this is not that I particularly object to the provision proposed by the amendment, but that I would rather this be done in regulations after we have consulted with the employers’ organisations and have had a further opportunity to look at how this process will work in detail.

The terms of a particular form are, I think, better dealt with in that way, unless it is a form of great substance, as in the case of the Police Criminal Evidence Act 1984. The way in which a form is laid out may change from time to time, and I think it is much better to deal with it in regulations, rather than trying to put it in the Bill. I have no great objection in principle to what amendment No. 70 seeks to do: I just think these issues are better dealt with elsewhere, and we will come to deal with them in terms of the way in which various forms might be dealt with—I think that is in clause 8, “Information to be given to jobholders”.

I am grateful to the Minister for his explanations in relation to Government amendments Nos. 120 and 122. They seem entirely sensible and I understand what the Minister is trying to do with them. I was pleased to hear the Minister say that he was not opposed to the principle of amendment No. 70. Our reason for tabling it is to seek clarity, to help the employer have clear records about who has and has not opted in, and perhaps to prevent any come-back against the employer if, at a later date, the employee says, “What is this deduction on my wage slip at the end of the month? I don’t remember authorising you to take any more money from me”. It is just to give that degree of protection to the employer and have a proper audit trail. That is where we are coming from, but the Minister has said that he is sympathetic to those type of actions and seeks to clarify how that would happen by way of regulation at a later date. With that commitment from him, I do not wish to press amendment No. 70 to a vote.

Amendment agreed to.

I beg to move amendment No. 121, in clause 6, page 4, line 15, after ‘qualifying’ insert ‘scheme which is a’.

The effect of the amendment would be to ensure that where a personal pension scheme is concerned under the provisions it must meet the definition of a qualifying scheme. With regard to how it would operate, clause 6 effectively extends the benefits of workplace pension savings for job holders on a voluntary opt-in basis. Job holders who opt in under the provision will be enrolled in an automatic enrolment scheme.

Subsection (6) enables the Government to regulate to allow an employer to use a qualifying personal pension scheme in place of an automatic enrolment scheme. That might benefit some employees. Indeed, a number of employees prefer a personal pension scheme for their own reasons. Providing that they are going into a pension scheme, I am content that they go into a personal pension scheme of their choice.

The amendment corrects the drafting for the provision that aligns with clause 3(5) and clause 5(5), which provide for the same in respect of automatic enrolment and automatic re-enrolment. That ensures that where a personal pension scheme is concerned under the provision, it must meet the definition of a qualifying scheme. I hope that hon. Members will be able to accept the amendment.

Amendment agreed to.

Amendment made: No. 122, in clause 6, page 4, line 17, at end add—

‘(7) Subsections (8) and (9) apply where a jobholder becomes an active member of an automatic enrolment scheme in pursuance of a notice under this section and, within the period of 12 months beginning with the day on which that notice was given—

(a) ceases to be an active member of that scheme, and

(b) gives the employer a further notice under this section.

(8) The further notice does not have effect to require the employer to arrange for the jobholder to become an active member of an automatic enrolment scheme.

(9) But any arrangements the employer makes for the jobholder to become, within that period, an active member of such a scheme must be made in accordance with regulations under this section.’.—[Mr. O’Brien.]

Clause 6, as amended, ordered to stand part of the Bill.