My previous blog on Auto enrolment seems to have hit a nerve with employers and employees alike.
Some employers have expressed ignorance of, or at best a vague understanding of, what the changes will mean for their business or their employees. In one local company I visited none of the workforce knew anything at all about Auto Enrolment. This is worrying to me as a HR person as employers face quite strict financial penalties if they miss their date for setting up a pension scheme.
I don’t provide pensions advice so I have no vested interest in the matter. I do however urge employers and employees to start asking the following key questions now.
If you are an employer now is the time to set up a suitable pension scheme for your employees. This will take at least a few months to arrange. You can get advice from any number of Independent Financial Advisers in your area. Make sure they are independent and not tied to one specific pension provider. You will need the best scheme for your business and your employees.
If you already operate a pension scheme this may already meet the requirements of Auto Enrolment but please do not assume that it does. Take advice from a pensions expert.
If you are an employee why not ask your employer for information on your membership of a company pension scheme? You may not earn enough to be automatically enrolled into a scheme but you may still be allowed to join if you wish.
I asked four financial experts for their opinions and here they are:
Philip Bousfield of Advanced Financial Planning said “ All employers will have to set up a pension scheme sooner or later. Now is the time to check when you have to be compliant with the law.”
David Wilson of The Independent Financial Advice Bureau said “This is a big opportunity for employees to establish an income in retirement. Their employers need to seek professional advice now.”
Graham Spratt of Positive Solutions Financial Services said “ Pension providers now have a backlog. Don’t get caught out with the large penalties which will be levied for not complying”.
Paul Gilsenan of St. James’s Place Wealth Management said “Having helped a number of my clients design and implement a compliant scheme recently, the feedback has been positive, with employers advising it is not as onerous a task as first thought. I would echo Graham’s point, pension providers are currently telling me they require an application six months before the staging date and they expect this timescale to increase.
So there you are; the pension’s experts have spoken.
What are you waiting for?