"Companies could be sleepwalking into pensions chaos"
Just seven months until it becomes mandatory for companies to offer auto-enrolment into a pension scheme, far too many businesses still simply don't know what is involved and what they will be required to do, employment law specialist Bibby Consulting & Support has warned.
After 1 October this year, UK employers must automatically enrol all ‘eligible employees’ into either the employer's pension scheme or the National Employment Savings Trust (NEST) pension scheme. ‘Eligible’ means those who are not already in an employer’s pension scheme or have been working at the company for fewer than 12 weeks.
Once in the scheme, employees will see their pension contributions supplemented by employers' contributions and subject to tax relief. The plan is for a staged introduction of the changes over four years, with the very largest employers the first to get involved. However, if they choose to, all companies can start auto-enrolment voluntarily from this July.
Michael Slade, Managing Director of Bibby Consulting & Support, said he remained "very concerned indeed" that businesses – especially small to medium enterprises (SMEs) – were in danger of sleepwalking into potential pensions chaos.
"We think it's a good idea to have all employees signed up to a pension," Slade said, "but too many businesses still haven't managed to get their heads around the obligations that automatic pension enrolment will place on them. Even though the start date has already been delayed once to help businesses, it will still be upon them before they know it."
He added: “Three months before the staging date for employers, the Pensions Regulator will remind them of their new duties but we would encourage everyone to start thinking about these issues now before it's too late. Not surprisingly, employees themselves are very confused about what their options are and they will remain that way until employers can get their heads around the changes."
Slade pointed out that all businesses will be expected to provide the right information to the right people at the right time and to make sure that it is complete and correct. All details must be provided in writing and it won't be enough to put up a poster or post information on a website or intranet. Also, all workers will need to be kept informed about any updates as they happen.
Slade concluded "These changes are potentially very confusing and if companies get them wrong they could be facing an unhappy workforce and a barrage of complaints. My advice is that all employers take some time out over the next week or two to think about the implications. Planning is absolutely essential to avoid the inevitable upheaval later on in the year."
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High resolution image for download: Michael Slade, Managing Director of Bibby Consulting & Support
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About Bibby Consulting & Support
Bibby Consulting & Support, formerly mhl support, has earned the reputation of being one of the UK’s leading providers of compliance management services. We enable employers and senior managers to attain and maintain compliance within the demanding, complex and constantly evolving fields of Employment Law, Health and Safety and Environmental legislation.
Bibby Consulting & Support is part of the Bibby Line Group, a family run business with a distinguished 200-year heritage, encompassing financial services, retailing, logistics, shipping, marine and offshore services.www.bibbycas.com