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Pensions Bill

I am glad that my hon. Friend has raised that matter because it allows me to put on the record reassurances that I hope she and others, including Opposition Members who have raised the issue too, will welcome. Importantly, there will be a ban on transfers between existing pension schemes and personal accounts; people will not be able to move in and out according to their whims. The personal account scheme will have an annual contribution limit. Employers with good existing schemes will be encouraged to continue to offer them via a simple and straightforward qualification test, and we are helping them to adjust to the new minimum employer contribution requirement by phasing that requirement in over three years. We have done some survey work on this question on behalf of the Department, and that suggests that any danger of levelling down will be very limited. Among employers who are already making contributions of 3 per cent. or more, the overwhelming majority—86 per cent.—plan to maintain or even increase contributions for current employees, and half intend to maintain or increase contributions for new employees. Employers will not suddenly go down-market, as it were, and discount their contributions if they have been substantially larger than the personal account's 3 per cent. minimum—it is a minimum, by the way, not a maximum—because they will then quickly find that they cannot recruit and retain their employees. Having a good pension is a valuable recruitment mechanism, especially in today's world.