Business owners need to review their workplace pension schemes before their employees start to do it for them!
For the past few years, the business press has been full of the advancing tide of auto enrolment as the various staging dates for different sized businesses have approached and then passed. This year, however, there is a vacuum – all seem to be in place so there is nothing more to do – or is there?
Of course, there is more to be done. Did we really think that with rather vague requirements at the beginning – a mixture of using old nonspecific workplace pension schemes and some hurriedly concocted new ones and especially the predominance of a government scheme of convenience in NEST – that everybody would have got the best solution?
Now is the time to take a look at what you have in place and ask some questions. The answers are not always what you may have hoped and it is important for business owners to be aware of this
As an employer, you have at least a moral duty to ensure that the scheme you have in place and your employees are paying money into is performing in line with the rest of the market. However, there is a current variation of over 10% per annum on the rate of return between the best performing and the worst pension schemes. What are your employees going to say if they discover they are contributing to one of the lower performing schemes? Some of the major players have admitted mistakes and are seeking time to put it right, but how long should you give them?
Andrew Hopper, pension consultant at Albert Goodman comments, “It seems certain that there will be a vibrant secondary market where employers realise they have made the wrong call. They want to change but haven’t a clue where to start. We can offer professional advice on this and other pension matters. In many cases it may not be right to change but your employees will demand that you have the explanation as to the whys and wherefores.”
Another area of concern with some of the workplace pensions is around the issue of governance. Who is responsible for what? Especially where a scheme was in place prior to auto enrolment, this is an area that has often not been looked at. If employers want to protect themselves they should definitely be looking into this and checking everything is in place. Albert Goodman has a simple programme to check the governance for £247. It is something worth taking up.
If employers want to discuss any aspect of their workplace pension following auto enrolment, they should contact Andrew Hopper at Albert Goodman on 01823 286096 or email Andrew.firstname.lastname@example.org . He will be happy to provide guidance.