CARE Scheme Rules Determine Qualification for Auto Enrolment
03 May (PLANSPONSOREurope.com) – The consultation into rules governing UK career-average revalued earnings (CARE) schemes will be critical in determining whether they are subject to new auto-enrolment legislation, Mark Howard, Partner at law firm Clyde & Co has told PLANSPONSOR Europe.
This week the government launched a consultation
CARE schemes being subject to incoming auto-enrolment reform. The consultation contains
proposals to revise Regulation 36 of the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010 and seeks views on whether the proposals will achieve the intended effect, particularly from employers with CARE pension schemes that they are intending to use as qualifying schemes.
Howard told PLANSPONSOR Europe: "Although this is a relaxation, it is really concerned with how the rules of the scheme are drafted. Even if revaluation is discretionary, the scheme has still got to be funded on the basis that there will be revaluation above the CPI / 2.5% minimum rate in order to be a qualifying scheme. So there would be an expectation that the discretion would be exercised in any event."