Auto-enrolment is a massive step forward for pensions. Significant and helpful as it is, it will not address the massive pensions underfunding across the workforce, nor 'fill the pensions gap'.
In talking to some Employers who will be reaching their Staging Dates in the next 2 years, I wonder whether the impact of this Legislation has really been considered.
The fact is there will be huge numbers of employees who have never been entitled to (or considered making) a pension contribution, and they will suddenly find themselves not only being enrolled into a scheme (which may not be the type of scheme they would have chosen for themselves) but also being required to make payments into it. This could see many employees confused by, or worse still, resentful of being forced to take part.
At the EB Partnership we have always seen communication as key in any Employee Benefits scenario, and so we would strongly recommend that when considering how to comply with this Legislation, a budget is created to allow the new pension scheme/s to be communicated to the workforce in the right way (i.e. paper based if pc access is likely to be a problem). This gives the employer the opportunity to achieve a real return on their investment spend and have it perceived as a very positive move forward, rather than risking any employee simply viewing this as a brand new form of taxation.
Auto-enrolment should be seen for what it is - a way of bringing millions of new members into saving for their own retirement for the first time. It will bring with it many challenges, but the support is out there....