Pensions industry welcomes 'clarity' brought by revision
UK - The UK pensions industry has welcomed the revised timetable for auto-enrolment set out by the government, for the clarity it gives businesses in making plans for the new regime.
Joanne Segars, chief executive of the National Association of Pension Funds, said: “We are pleased the government has spelled out a new timetable for auto-enrolment.
“This will provide the clarity businesses need to get on with preparing for these important changes.”
But she warned that the government now needed to stick to the new schedule and avoid last-minute changes that would undermine the success of the reforms.
“There have been too many delays already,” she said.
Consultancy Barnett Waddingham said it generally welcomed the timetable because it could now start helping clients with their auto-enrolment duties with much more certainty.
Clive Grimley, partner, said: “The longer phasing period is good news for employers, as it will help them incorporate the financial implications of the changes over a longer period and will help with costs if recessionary pressures continue in the short term.”
Pensions provider NOW:Pensions, part of Danish pensions giant ATP, expressed regret at the missed pensions savings caused by the delay.
Chief executive Morten Nilsson said: “It is good to have clarity on dates and confirmation that auto-enrolment is going ahead with no further disruption.
“However, while delay for the medium and smaller companies is helpful from those companies’ perspective in the current economic climate, the delay is certainly not helpful from the perspective of their employees in the long term.”
Grimley said the later date may make employees less likely to opt out, but he cautioned that it could also increase their perception that paying the minimum contribution rates was enough.
“It also prompts all parties to watch developments as the timeframe spreads into the next government’s period of office,” he said. “Could compulsory pensions be a feature in the next election manifestos?”
Robin Hames, head of technical, marketing and research at Bluefin Advisory Services, said: “It is vital employers now revisit their planning and determine the latest date by which they have to comply with the regulations.”
But he said it was just as important that they consider their options fully.
“People often forget that these staging dates are the very last moment for commencement compliance - employers can, and should, consider whether an earlier date would better suit their broader business needs,” he said.
Segars described the reforms as a “once-in-a-generation” chance to help tackle the UK’s pensions savings crisis.
“But they require a lot of preparation,” she said.
“Employers need to make important decisions on how to fund the new pensions and what type of schemes they will use. They will also have to decide how they will manage the costs, and how they will set up the payroll.”