Memorandum submitted by Engineering
Employers' Federation (PE 10)
EEF's Submission to the Parliamentary
Scrutiny Unit on the Pensions Bill
Introduction
1. EEF is the representative voice of
manufacturing, engineering and technology-based businesses with a growing
membership of 6,000 companies employing around 900,000 people. Comprising 11
regional associations, the Engineering Construction Industries Association (ECIA)
and UK Steel, EEF is one of the UK's leading providers of business services in
employment relations and employment law, health, safety and environment,
manufacturing performance and education, training and skills.
Executive Summary
2. EEF believes that the new low-cost
personal accounts scheme, with auto-enrolment and compulsory minimum employer contributions,
which the Government is now introducing through the Pensions Bill is a key
element of its comprehensive and inter-related package of reforms to the UK's
pensions system. Providing personal accounts are simple for employers to
administer and individuals to understand, we believe that they will help to
achieve the Government's objective of encouraging more people to save for their
retirement.
3. However, EEF has a number of concerns about some
detailed aspects of personal accounts that we consider still have to be
addressed and resolved by the Government. In some cases, this needs to be done
during the Pensions Bill's passage through Parliament. In other cases, they are
not issues to be addressed through the Pensions Bill itself but they will need
to be resolved by the Government prior to the introduction of personal accounts
in 2012. An example of the latter is the need for the Government to provide some
initial financial assistance for smaller employers when personal accounts are
introduced.
4. EEF regards the deregulation of
occupational and private pensions as an equally important part of the Government's
package of measures to reform the UK's pensions system. The deregulatory proposals
in the Pensions Bill provide a welcome supportive message to those employers
who are voluntarily providing occupational pension schemes for their employees.
5. We therefore feel that the proposed
reduction in the annual "cap" on revaluing deferred pensions from 5% to 2.5% is
an encouraging first step in the deregulation of occupational and personal
pensions. However, the Government must now build on this by, for example,
introducing statutory override to help employers to introduce this proposed change.
6. The issues covered in this Submission
are-:
· The Annual Contribution Limit
· The Enforcement/Compliance Regime for New Worker/Employee
Rights
· Workplace Private Pensions
· The Role of the Pensions Regulator
· Government Support for Smaller Employers
· Repeat Auto-Enrolment
· The Deregulation of Private Pensions
· The Interaction with Means-Tested Benefits
7. In addition to these issues, EEF has some
specific concerns about a number of the Pensions Bill's provisions and we are
therefore planning to put forward amendments to various Clauses in the Bill that
we believe would address these concerns.
The Annual Contribution Limit
8. In its response to the consultation on the
Personal Accounts White Paper that was published in June 2007, the Government stated
that, having reviewed the wide variety of views that had been expressed on the
annual contribution limit into personal accounts, it had decided to have an
annual contribution limit of £3,600.
This figure would be based on 2005 earnings levels, with this annual
limit "being uprated from that point to implementation from 2012". Whilst this was not in line with EEF's view
that there should be no annual limit on employer/employee contributions other
than the current annual limit on pension contributions that is set by HMRC, we
considered that, on balance, the Government's decision was a sensible
compromise between many different views that we felt had satisfactorily resolved
this controversial issue.
9. We are therefore very surprised and
disappointed to see that, whilst Clause 53 of the Pensions Bill refers to the
introduction of an annual contribution limit, there is no reference to the
level of this limit in either the Pensions Bill itself or the Bill's
Explanatory Notes. We consider that both
the £3,600 annual contribution limit and its uprating in line with earnings
between 2005 and 2012 need to be set out clearly in the Pensions Bill as we
feel that the absence of this detail will inevitably reopen the debate on this important
issue which we felt had been resolved.
10. However, we are pleased to see that,
according to the Pensions Bill's Explanatory Notes, Clause 53 will allow the
Secretary of State to set "a lump sum contribution limit over the member's
lifetime". EEF considers that
individuals should be able to make the occasional lump sum contribution into
personal accounts over and above the annual contribution limit providing this
does not add unnecessarily to the cost of administering personal accounts which
we believe must be kept as low as possible.
11. The facility to make the occasional lump
sum contribution would provide the opportunity for some of those in the
Government's target group for personal accounts to enhance their retirement
income. We believe this would be
particularly beneficial for women who often have periods out of the labour market
to care for children and elderly relatives or periods when they are working
part-time. It would also help those
women who, after being divorced, realise that they need to boost their income
in retirement and may want to use some of the funds from their divorce
settlement to achieve this objective.
The Enforcement/Compliance Regime
for New Employee/Worker Rights
12. The Pensions Bill will introduce some new
employee/worker rights associated with the right for eligible employees/workers
to be auto-enrolled into a qualifying workplace pension scheme (including
personal accounts) and, if they decide not to opt out, the right to have the
minimum employer contribution. EEF was pleased that the Government stated in
its Personal Accounts White Paper that the enforcement/compliance regime for
these new rights would be "light-touch, risk-based and proportionate" and we
believe that this better regulatory approach must be followed. In addition, it
must not impose additional regulatory burdens on the vast majority of employers
who will endeavour to comply with this new legislation.
13. We consider that the provisions on these
new rights in the Pensions Bill follow this better regulatory approach and that
they are broadly in line with current employment legislation. However, we understand
from information in the Bill's Impact Assessment and recent discussions with
DWP/BERR Officials that the Government may be tabling an amendment during the
Bill's Committee stage discussions that would be designed to prevent employers
from screening individuals out of the recruitment process because of their wish
to save in a qualifying pension scheme.
14. EEF recognises that such an amendment to
the Pensions Bill needs to be made. However, we feel that it will be very
important for this measure to be limited to introducing a sanctionable
prohibition on employers doing certain things before offering employment, such
as attempting to make a job conditional on non-membership of a qualifying workplace
pension scheme or asking questions about an individual's intentions about
membership in either a job application form or at a job interview. We are
firmly of the view that this proposed amendment should not introduce the right
for individuals to be able to seek, at an Employment Tribunal, compensation or
any other form of redress where there has been a breach of this prohibition
and/or they have been unsuccessful in applying for a job. We understand that it will be proposed that
the Pensions Regulator should be the enforcement body for this new provision
and we would support this approach.
Workplace Private Pensions
15. EEF recognises that Workplace Private
Pensions (WPPs) are an important part of the range of pension arrangements that
are currently provided by employers for their employees. We also understand
that there are some difficulties with current EU legislation (particularly the
EU Distance Marketing Directive) about allowing auto-enrolment into WPPs.
However, we consider that, on an urgent basis and ideally by 2012, the
Government should take the necessary steps to have changes made to the relevant
EU legislation so that auto-enrolment into WPPs is then allowed. We also feel that, in order to reassure all
those concerned, it would be very helpful if the Government made a clear
statement about its intention to do this during the Pensions Bill's Second
Reading on 7 January 2008.
16. Since it is likely to take some time to
change EU legislation to allow auto-enrolment into WPPs, we understand that the
Government will be tabling an amendment during the Pensions Bill's Committee
stage discussions that will, in the meantime, exempt employers with WPPs that
meet certain specified criteria from having to auto-enrol their employees into
a qualifying workplace pension scheme (including personal accounts).
17. EEF would, in principle, support such an
amendment providing it does not impose disproportionate administrative burdens
on employers and/or require them to change their current recruitment procedures
by, for example, changing their contracts of employment or offer letters. Our
preferred approach would be for employers to have to give new employees a
standard application form to join their WPP (probably drawn up and
pre-populated with the employee's details by the WPP provider) at the same time
as their offer of employment is made. In order to meet in full their legal
requirements, we appreciate that employers would also have to give this
proposed standard application form to all eligible current employees who are
not members of their WPP. However, we are
firmly of the view that any new requirements that are introduced by this
proposed amendment should only apply to employers who provide WPPs for their
employees.
The Role of the Pensions Regulator
18. EEF has no objections to the Government's recent
decision that the Pensions Regulator will be responsible for monitoring
personal accounts and ensuring employer compliance with the requirements set
out in the Pensions Bill to automatically enrol employees into a qualifying
workplace pension scheme, including personal accounts. However, we consider
that it will be very important for the Pensions Regulator to be given the
necessary expertise and resources to undertake this new and very different role
as well as to work closely with other bodies, particularly HMRC.
19. In addition, these new responsibilities must
not impact adversely on the Pensions Regulator's current responsibilities for
monitoring work-based pension schemes and protecting the benefits of the
members of these schemes, a difficult and increasingly complex role that we
feel the Pensions Regulator is handling very well.
Government Support for Smaller
Employers
20. EEF is pleased that, to reassure and assist
all employers, the Pensions Bill confirms in primary legislation that the
minimum compulsory employer contribution into a qualifying workplace pension
scheme will be 3% of banded earnings and that this minimum employer
contribution will be phased in gradually.
However, we are firmly of the view that, although this is not a matter to
be addressed in the Pensions Bill itself, the Government also needs to provide
some initial financial assistance for smaller employers when the requirement
for employers to auto-enrol into a qualifying workplace pension scheme
(including personal accounts) comes into force in 2012.
21. In our view, the provision of this initial
financial assistance would not only recognise the additional costs and
administrative burdens that many smaller employers will face for the first time
in contributing to their employer's pension arrangements but it would also help
to make the small business community more supportive of these new pension
arrangements. This latter point is very
important because many of those who the Government is trying to encourage to
save for their retirement work for smaller employers and the attitude of these employers
will therefore be very important for the successful implementation of this part
of the Government's pension reform programme.
22. Following discussions with our members, we
have developed a possible way in which the Government could provide this initial
financial assistance for smaller employers without disadvantaging employees who
work for them, an important prerequisite for our members. We have now costed our proposal, based on
the assumptions about employee take-up for personal accounts that were set out
in the Pensions Commission's Report, and discussed it with DWP/Treasury
Ministers and Officials. A copy of a
paper detailing our costed proposal, as well as addressing some specific issues
that have been raised with us by Treasury Officials, is attached as an Appendix
to this Submission.
Repeat Auto-Enrolment
23. EEF is pleased that the Pensions Bill's
Explanatory Notes confirm that repeat
auto-enrolment for eligible employees "will not be more than once in a
three year period for either each employer or each jobholder". We have also noted
that Clause 5 of this Bill gives the Secretary of State the power to set the
dates for repeat auto-enrolment and we hope that this will include allowing
employers to undertake this on a fixed date (such as the start of the tax year)
for all their eligible employees rather than on the anniversary of the date
that each individual chose not to be auto-enrolled. We consider that this approach would not only be easier for
employers, particularly smaller employers, to administer but it would also
reduce the chances of inadvertent non-compliance with this new legislative
requirement.
24. Another issue about repeat auto-enrolment
that we consider the Government also needs to address is repeat auto-enrolment
into defined benefit, and some defined contribution, occupational pension
schemes as they provide non-pension benefits such as death in service and
ill-health retirement benefits. In our
experience, companies generally require employees to pass a medical examination
before they are allowed to join such schemes after they have initially turned
down the opportunity to join them. This approach prevents employees from waiting
until they have a medical problem before they try to join the scheme and
therefore gain access to these valuable non-pension benefits. When employees have not passed this medical
examination, employers either do not allow them to join their pension scheme or
restrict their access to non-pension benefits relating to death in service or
ill-health retirement.
The Deregulation of Private Pensions
25. EEF regards the deregulation of
occupational and private pensions as a very important part of the Government's
package of measures to reform the UK's pensions system. It complements the
other key elements of this package, namely improvements in state pension
arrangements together with a gradual increase in the state pension age and the
introduction of the new low-cost personal accounts scheme with auto-enrolment
and a minimum employer contribution for those who do not opt out.
26. We have therefore welcomed the provisions
in the Pensions Bill that will reduce the annual "cap" on revaluing deferred
pensions from 5% to 2.5% for rights that accrue from some future date that has
yet to be determined. Whilst some EEF members have indicated that they would
have preferred this proposed reduction to have applied in the case of all
revaluations after the appointed date rather than just to rights that accrue
after this date, we still consider that this reduction will help to reduce the
costs for employers of providing defined occupational pension schemes. As a
result, its introduction will probably make it more likely that those schemes
that are already closed to new members will decide to remain open for future
accrual to current members.
27. This proposed change would also bring the
revaluation "cap" for deferred benefits into line with the change in the revaluation
"cap" for pensions in payment that was introduced by the Pensions Act 2004. It
would also discourage the practice that we understand is now sometimes
occurring of individuals voluntarily deciding to leave their occupational
pension scheme, but without leaving their employer, because they feel that
their deferred pension benefits will be better protected against inflation compared
to their continuing in active membership of the scheme.
28. Whilst the introduction of the proposed
reduction in the revaluation "cap" on deferred benefits is very welcome, it should
only be the first step in the Government's deregulation of private pensions. In
particular, the Government needs to introduce statutory override to enable
schemes to make changes to their rules about the indexation of benefits in
respect of both the proposal in the Pensions Bill and the reduction in the
revaluation "cap" for pensions in payment that was introduced by the Pensions
Act 2004.
29. This statutory override is needed because a
number of EEF members have told us that they have had, or are having, difficulties
implementing the provision in the Pensions Act 2004, primarily due to the
wording of their trust deed and rules. They anticipate that they would
therefore face similar difficulties implementing the reduction in the
revaluation "cap" on deferred benefits that the Pensions Bill will introduce.
We would therefore urge the Government to enable statutory override on these
issues to be able to be exercised by employers without having to obtain trustee
consent
The Interaction with Means-Tested
Benefits
30. EEF supports the new low-cost personal
accounts scheme that is being introduced through the Pensions Bill and believes
that it will help many people, who currently do not have the opportunity to
join an occupational pension scheme, to save for their retirement. However, we
recognise that there are concerns that, as detailed analyses by the Pensions
Policy Institute (PPI) in some recent PPI Reports have shown, personal accounts
may not be suitable for all employees due to their interaction with
means-tested benefits. This therefore means that individuals will need to be
provided with very clear information about personal accounts and generic advice
to help them make informed decisions about whether or not they should opt out
of personal accounts.
31. In the Report that the PPI was recently
commissioned to produce by the B&CE Benefit Scheme ("Increasing the Value
of Saving in Personal Accounts: Rewarding Modest Amounts of Pension Saving"),
the PPI identified a number of policy options for reducing the risk that
employees are auto-enrolled into saving when it is not suitable for them. These
were:-
· Not auto-enrolling some groups who are more likely to be at
risk of low returns, such as low earners and today's older people
· Increasing the trivial commutation limit to allow more
individuals to take small amounts of pension saving as a lump sum
· Allowing individuals to have a limited amount of pension
income without it affecting their entitlement to means-tested benefits.
32. EEF would not support the first of these
policy options as we believe that all eligible employees should be
auto-enrolled into a qualifying workplace pensions and, moreover, exempting
some groups of employees could also create administrative burdens for
employers. However, we consider that both of the other policy options that are set
out above (increasing the trivial commutation limit and allowing individuals to
have a limited amount of pension income without it affecting their entitlement
to means-tested benefits) warrant more detailed examination by the Government
although we acknowledge that, in both cases, they would increase Government
expenditure.
33. Whilst we do not regard this issue as
something that needs to be resolved in the Pensions Bill itself, we consider
that the Government should now examine this issue in more detail and try to
resolve the concerns about the interaction between personal accounts and
means-tested benefits that have been raised by a number of organisations and
commentators before these new pension arrangements are introduced in 2012.
January 2008
Appendix
Small firms and personal accounts
The case for supporting small firms
This note
looks at the need for some form of modest and temporary financial support for
small firms in the period immediately following the introduction of personal
accounts, sets out one possible model for providing this initial financial
assistance and addresses some of the potential objections to it.
In our
submissions to the Pensions Commission on reforming the UK's pensions system and
more recently to the government, EEF has consistently opposed any form of
exemption from personal accounts or lower employer contributions for smaller
firms. We believe that such an approach would create perverse incentives and
potentially a two tier economy.
However,
we see the role of smaller employers as
being critical for the successful implementation of personal accounts given
that many of those who are not currently saving for their retirement work in
small businesses. We therefore feel that the government should take all the
necessary steps to try to ensure that the small business community is
supportive of the introduction of personal accounts.
Many
smaller firms will face a great challenge in absorbing the extra costs of
administering and contributing to personal accounts on behalf of their
employees and we consider that there is therefore a strong case for providing
them with some form of initial financial assistance. While small firms will
benefit from the government's welcome decision to phase in contributions to
personal accounts, we consider that the government should also provide them
with some targeted financial assistance when personal accounts are introduced.
We believe that this will help them to absorb these increased costs as well as
help to create an environment in which the smaller employer community is likely
to be less resistant to the introduction of compulsory employer contributions
into personal accounts.
A possible model for supporting
small firms
EEF has
examined a number of different models for this initial government financial
support. Our preferred model involves
the government reimbursing smaller employers for a proportion of the
contributions that they have made into personal accounts for their employees
during the initial years of its operation. We have developed this model as one possible
way to approach supporting smaller firms and have calculated the costs
associated with it.
This paper
updates previous costings developed by EEF before the publication of the
government's personal accounts White Paper. Our new figures are based on the
White Paper's announcement of the phasing in of employer contributions from 1%
to 3% of a band of earnings over a three year period and the assumptions in the
Pension Commission's report about participation in their proposed National
Pensions Savings Scheme. We have also
based the figures around the staged changes up to 2009/10 in National Insurance
Contribution thresholds announced in the 2007 Budget. For consistency with
these thresholds, we have assumed that average earnings (based on the 2006 Annual
Survey of Hours and Employment) grow by 4% per year up to 2009.
In the
table below we look at the costs of compensating small firms in the three years
over which the contributions are phased in, i.e., the Year 1 figures are based
on 1% contribution rates, Year 2 on 2% and Year 3 on 3%. We also look at how the costs to the
Exchequer would vary according to the rate at which compensation was paid -
with compensation rates of 25%, 33% and 50% - and the size of firm covered,
looking at covering companies with up to 49 employees and with up to 19
employees.
The table
shows that compensating firms with up to 49 employees for half of their
contributions would cost £221m in the first year, but that restricting it to
smaller firms - those with less than 20 employees- saves just over a quarter of
the costs, taking them down to £161m. These savings could be quite significant
in the second and third years as the cost of compensation builds up in line
with the increasing employer contribution rate.
Costs to the Exchequer
of compensating smaller firms for employer contributions into personal
accounts, £m
Year 1
|
Compensation
rate
|
|
|
Firm size
(employees)
|
50%
|
33%
|
25%
|
1-49
|
221
|
147
|
110
|
1-19
|
161
|
107
|
80
|
|
|
|
|
Year 2
|
Compensation
rate
|
|
|
Firm size
(employees)
|
50%
|
33%
|
25%
|
1-49
|
441
|
294
|
221
|
1-19
|
322
|
214
|
161
|
|
|
|
|
Year 3
|
Compensation
rate
|
|
|
Firm size
(employees)
|
50%
|
33%
|
25%
|
1-49
|
662
|
441
|
331
|
1-19
|
483
|
322
|
241
|
Source: EEF
calculations, Pensions Commission's Report, Budget 2007, Annual Survey of Hours
and Earnings
Addressing concerns over supporting smaller firms
We believe that
the costs associated with our proposed model for temporarily supporting smaller
firms in their contributions to personal accounts are modest in comparisons to
the savings to the Exchequer from the proposal to end contracted out rebates
for defined contribution occupational pension schemes. However, if cost was a
major concern, there would clearly be scope to address this by applying a lower
size threshold for firms receiving assistance with their contributions into
personal accounts than has been used in the above table. One way to smooth costs to the Exchequer
over the three years would be to compensate firms for 50% of contributions in
year 1, 33% in year 2 and 25% in year 3.
Our recent
conversations with HM Treasury officials have revealed that they have some more
fundamental concerns about the practicalities associated with targeting
financial assistance at firms of a certain size and are worried that it would
lead to firms fragmenting themselves into smaller groups in order to qualify
for it.
We believe
that these concerns about the practicalities of providing some initial
financial assistance are overplayed given that European and UK company law
definitions for smaller companies are already in place in relation to transfer
pricing, capital allowances, R&D tax credits and other tax incentives,
audit requirements and accounts disclosure. These are based around thresholds
for staff headcount, turnover and balance sheets. For EU purposes, these
include micro firms with less than 10 employees and annual turnover below
€2m.
The issue
of fragmentation is more complex and we have discussed these concerns in some
detail with senior tax experts from RSM Robson Rhodes. They have advised us that, since there is
already "anti-fragmentation" legislation in the tax legislation, it would be
relatively easy for the government to introduce similar counteractive
legislation that would make such reorganisations ineffective. An example of how current tax legislation aims to stop companies from enjoying tax
benefits as a result of fragmentation relates to the different rates of
corporation tax. The top rate of corporation tax is 28%, although a reduced
rate (22%) is available for companies that make limited profits. To pay the
full rate of tax a company needs to make profits in excess of £1.5m, the lower
rate is available for companies making profits of up to £300,000.
An obvious response to this would be
for a company making £1.5m in profits to create five separate companies each
having profits of £300,000 and thus pay the lower rate of tax on all the
profits. Not surprisingly the legislation indicates that the limits are divided
by the number of companies that are 'associated' with one another in the
period. The definition of associated is quite complex, but essentially boils
down to 'under common control'. Thus, in the above example the upper limit
(£1.5m) is divided by 5, the number of associated companies, giving a revised
upper threshold of £300,000, meaning that each company pays tax at the full
rate of 28%. A similar approach of aggregating the results of companies under
common control could be employed when looking at the proposed financial support
for smaller employer' contributions to personal accounts.
Businesses
would therefore need to bear in mind that this might make any fragmentation
exercise a waste of effort and that there could be significant further costs
were they subsequently to decide to recombine the business. Given that the exercise may appeal more to
comparatively smaller businesses, the relative costs of undertaking
fragmentation can be seen as significant.
RSM Robson
Rhodes's analysis also suggests that
the costs associated with a company fragmenting in order to qualify for this
financial assistance would outweigh any benefits that would, in any case, be time-limited
to three years. In particular, they have identified the following issues that
companies would need to consider before undertaking fragmentation. We have
marked with an asterisk the issues that
would be particularly time-consuming for smaller companies.
1. Where
companies or limited liability partnerships are involved there will be the cost
of multiple formations and annual
filings with Companies House. *
2. For
companies which are required to have an audit, or wish to have one, there will
be additional audit costs.
3. For
companies and other businesses, there will be multiple corporation tax/income tax filings by means of a
separation of business.*
4. Depending
upon the business structure used, there could be appreciable tax de-grouping costs on the de-merger of the business
including capital gains costs and stamp duty/stamp duty land tax costs. While reconstruction reliefs can often
eliminate these tax costs, the process and costs involved to be eligible for
such reliefs may not be very attractive to businesses. Tax exemptions may also require HMRC
clearances demonstrating the business purpose involved which may cause difficulties
in view of the main intent of the planning.
While it would be possible to envisage a separation into several
companies in a group in a manner which would not constitute a demerger, it is
hard to consider that this will be likely to represent an effective
fragmentation when the new rules are introduced.*
5. Companies/businesses
would need to consider whether multiple
VAT registrations are appropriate.
6. Companies/businesses
would need to consider whether multiple
PAYE references were appropriate.
It would appear inconsistent to operate a single PAYE number while
claiming there were separate employment units for pensions purposes although in
theory this may be conceivable.
7. Separation
of the businesses will, from an employment law perspective, need careful review
including the potential impact of the
TUPE Regulations. Employment advice
will be required on this but we envisage that, in most cases, TUPE provisions
will be seen as having application but this would appear inconsistent with the
potential benefits of fragmentation. *
8. Legal
issues may arise in terms of the joint
ownership or usage of assets e.g. property, usage of intellectual property,
etc.*
9. Businesses
may need to look at shared cost
arrangements on the use of assets and also the shared costs in terms of
head office facilities. The process of
defining the approach to apportioning common costs and posting them in the
relevant accounts is likely to represent an additional administrative
exercise. In the case of any businesses
which are not small or medium sized enterprises, UK transfer price regulations
would apply as between companies even where all the companies are within the
UK. In applying these UK transfer
pricing rules, limits will be defined taking into account associated
enterprises. It is hard to envisage,
given the level of fragmentation that may be involved in comparatively large
businesses to achieve sufficient fragmentation, that the exercise in defining
costs on a sharing basis together with documenting these costs will be seen as
an acceptable or cost efficient strategy.
10. Similar
issues could relate to the sharing of employees
especially where the units were defined in such a way that they would need
to share or transfer operational employees over time or on a seasonal or needs
basis. In certain cases, this may challenge
the validity of claiming that a certain individual was properly an employee of
a particular unit.
RSM Robson
Rhodes have also stated that there may well be a range of additional issues that
would need to be considered by companies considering fragmentation in terms of
branding, customer perception and issues such as the situs of contract,
novation of contract, operation as undisclosed agent etc.
They
conclude that "even in the event that counteracting measures were not
introduced either from inception or from a very early stage to counteract the
policy of fragmentation, the number of issues involved would be likely to make
a fragmentation strategy unattractive to the majority of businesses with a view
to saving the associated administrative cost and payroll cost inflation
associated with the new pensions saving scheme. "