Written by Paul Beasley, director of biz4Biz and managing director of RHG Financial Services.
Any local business reading this should, by now, be aware of the need to provide their entire workforce with a pension, by 2017 at the latest. Many of you will already be in the process of evaluating, planning and installing a suitable scheme. However, what you may be blissfully unaware of is the government’s consultation paper asking for responses to proposed changes in Auto Enrolment legislation.
Yes, half way through the process of ensuring all employees have access to a workplace pension the goalposts are likely to move!
My company is heavily involved in advising employers and we have responded formally to the consultation. Auto Enrolment is already overly complicated and bureaucratic. It is an extra layer of cost to business at a time when they are trying to recover from the recession. Most SMEs do not have the knowledge or the time to ensure compliance with the rules and have to pay for advice.
Proposing changes now shows a complete lack of understanding of the additional burden this will place on SMEs.
Larger employers who have already complied may have to start again; there is no guarantee existing schemes can be amended. The take up rate amongst employees so far has been very high, despite the widespread mistrust of pensions in the past. Any changes now may cause confusion and resentment and risks a fresh loss of confidence to the detriment of society as a whole.
25 years ago we had a private pensions system that was the envy of the world. Since then successive governments have over regulated, taxed, limited benefits and overly complicated pensions. This has resulted in the black hole in pensions saving that now requires compulsion via Auto Enrolment.
Auto Enrolment has so far been a success. It is time for government to stop tinkering and leave business alone to get on and complete the job