Paymaster, the privatised arm of the Paymaster General’s Office, has emerged as a candidate to run the government’s new national pensions savings scheme (NPSS).
Tomorrow, pensions reform minister Stephen Timms will meet the company, which already administers the payment of one in every eight UK pensions, including those of the NHS and the Armed Forces.
Paymaster claims that it can keep administration costs low enough to bring the annual charge for a national savings scheme down to 0.3%, including fund management, within seven years, reports the Times.
The Pensions Commission proposed the creation of a NPSS last November to encourage people without occupational or private retirement plans to save.
Lord Turner, the commission chairman, suggested that the basic annual management charge on an NPSS account should be about 0.3% of savings.
Paymaster is expected to tell Timms that it could collect workers’ contributions to the NPSS by direct debit, based on lists of workers supplied by companies.
It would pass payments to whichever of a limited number of government-approved fund managers or trusts the employee chose. On retirement, the savings would be used to buy an annuity.
The government could declare its plans for how an NPSS would be run as early as this month, when the Department for Work and Pensions is to issue a White Paper in response to the Pensions Commission.Turner remains steadfast on pensions plans