This book explores the historical position of pensions law in the UK and the recent influences which have led to the introduction of Auto-Enrolment and subsequent reforms. Alternative models, such as the US and Australia, are also considered as well as the function of law in bringing about political changes.
The question of saving for retirement is of national and international importance and many governments are wrestling with the issue of how to deal with the pension funding crisis. Consequently political policy has, in many cases, combined with behavioural science to inform new laws which have acted to shift the burden from the state into the private sector. Around the world responsibility is being moved onto individuals and employers as the state retreats from provision of state support in retirement; this book offers a sophisticated analysis of the role of legal intervention to facilitate this shift.
The book explores the work of behavioural economics, its global influence on understanding financial decision-making and its application to legislation which seeks to influence consumer outcomes. Drawing on qualitative empirical research to explore the experience of implementation of Auto-Enrolment, this timely work considers the interaction with the work of behavioural science to highlight the social costs of the new regulatory regime.
This title is included in Bloomsbury Professional's Pensions Law online service.
1. An Introduction to the Work
I. Background
II. Pensions
A. Public Sector Pensions
B. Private Pensions: Occupational Pension Schemes
III. Key Policy Considerations
IV. The Road to Auto-Enrolment: The Rise and Fall of Voluntary Private Pensions
V. The Road to Auto-Enrolment: The Pensions Commission
VI. Lessons from Abroad
VII. Conclusion
2. Introduction of Auto-Enrolment to the UK
I. Auto-Enrolment and Parliamentary Intent
A. Increase Saving by Default
B. Prevent a Reduction in Existing Pension Benefits or Levelling Down
C. Education of the Workforce
D. Private Pension Saving Compatible with State Benefits
II. Legislative Reality
III. Post Implementation Legislative Changes
A. Value
B. Costs and Charges
C. Scheme Governance
D. Master Trusts
E. Taking Pension Benefits
IV. Conclusion
3. Legal Paternalism and the Auto-Enrolment Regime
I. Introduction
II. Autonomy v Law
III. Legal Paternalism
A. The Rise of Paternalistic Legislation
IV. Soft Paternalism or Nudge
V. Paternalism and Contracts
VI. Intention of Legal Intervention
VII. Proof and Value Measurement
VIII. Conclusion
4. The Role of Behavioural Economics in Legal Intervention
I. Introduction
II. Behavioural Economics
A. Inertia and Procrastination
B. Framing and Presentation
C. Social Influences
D. Difficulties in Assessing Probability
III. The Influence of Behavioural Economics on Law and Policy
IV. Regulatory Intervention and Choice Architecture
A. Policy of Legal Paternalism
B. Choice Architects
C. Alternatives to Soft Paternalism/Choice Architecture
V. Auto-Enrolment as Choice Architecture
A. Auto-Enrolment
B. Opting-out
C. Defaults
D. Auto-Enrolment and Behavioural Bias
E. Framing and Disclosure
VI. Conclusion
5. Empirical Research Findings
I. Introduction to the Research
II. Research Design and Methodology
III. Findings
A. Action
B. Barriers to Decisions
C. Intervention and Implementation
D. Engagement and Understanding
E. Trust
IV. Conclusion
A. Choice and Defaults
B. Understanding
C. Information
D. Individual Perception of Auto-Enrolment
E. The Employee/Employer Relationship and Auto-Enrolment
F. Impact of Gender and Age
G. Negative or Unforeseen Consequences of Auto-Enrolment
6. Unintended Consequences: Remedies
I. Introduction
II. Fiduciary Duties Owed to Employees
A. When Do Fiduciary Obligations Exist?
B. The Consequences of Fiduciary Obligations
III. Duties Owed by the Employer as an Agent
A. The Agency Relationship
B. Consequences of Agency
IV. Duties Arising from the Contract of Employment
A. Implied Terms
B. Auto-Enrolment Compliance and the Contract of Employment
V. Duties Owed to the Employee by the Pension Provider or Advisors
A. Provision of Advice
B. Misunderstandings and Mis-statements
C. Third Party Liability
D. Reliance on Financial Regulation
VI. Conclusion
7. Conclusion
I. Why Do We Have Auto-Enrolment?
A. The Ageing Population
B. Combat Behavioural Traits
II. Choice Architecture and Justification
A. Intervention not Persuasion
B. Behavioural Economics
III. Has Legislative and Practical Implementation Reflected the Policy Intention?
A. Defaults
B. Employer Discretion
C. Communication and Active Choice
IV. Are There Unforeseen or Unintended Consequences and How Do These Affect Justification for Legal Intervention?
A. Barriers and Misunderstandings
B. Reliance on Defaults
C. Advice
D. Detriment and Responsibility
E. Social Costs and Remedies
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