Are you ready for pension auto-enrolment?
Posted on 05 October 2012
Pension auto-enrolment has hit the headlines in a big way since its implementation on 1st October 2012. The government has stepped up its media activity, making sure the public are aware of the upcoming pension changes. Industry commentators and journalists are already making predictions about the pay freezes and restrictions that companies will have to make to cover the eventual cost of the 3% employer contribution.
So, as an employer, are you ready? Do you have a strategy in place? Have you allocated budget for the scheme set-up costs? Have you budgeted for the increase in year-on-year cost? Do you have a communications plan to lead your employees through the changes to their pay? And are you ready to start answering the questions and concerns from employees that this will generate?
Here are a couple of stats that might start you thinking …..
- The government predicts that the number of employees joining a workplace pension will go from 33% to 80% (source: ONS)
- The additional cost of employer contributions will increase pay spend by at least 2% year on year.
We suggest that rather than looking at this change to pension provision in isolation, it may be that you can find the necessary budget and protect your employee proposition by reviewing your reward offer in totality. We’ve been working with clients who have approached this with a whole range of responses – from deciding they want to make the payment in full as extra budget, to those who have decided to cut down on other benefits, and those ‘saving’ some of the pay review pot to support the transition. However you do it, it’s essential to keep employees engaged with the business – those who are already in the pension scheme and those who are joining for the first time will have different feelings about the impact on their overall remuneration package
Innecto Reward Consulting are offering organisations bespoke, reward workshops that look specifically at this issue. With a clear reward strategy, employee engagement at the heart of your activity, and the necessary tools and information, your organisation can come out stronger.
Please get in touch if you'd like to find out more.
Deborah Rees, Director of Consulting
