Compulsory pensions by 2012?

chihuahuabear

I recently heard that company pension schemes were to be made compulsory by 2012.

Does anyone have any in-depth knowledge of this?

Lokolo

Everyone will be put in a opt-in/out (don't know which is which!) scheme. So they will automatically be put into a scheme and the employee has to back out if they want to stop paying.

I believe employers also have to contribute a minimum or something to it.

Googlewhacker

Lokolo wrote: »

Everyone will be put in a opt-in/out (don't know which is which!) scheme. So they will automatically be put into a scheme and the employee has to back out if they want to stop paying.

I believe employers also have to contribute a minimum or something to it.

it will be a opt out scheme

foxy-roxy

I think it's a good idea, I have just joined my company pension and my employers match my contributions, I am hoping to follow in my dad's footsteps and retire at 50:D

Then it's off to see the world:p

Lokolo

Googlewhacker wrote: »

it will be a opt out scheme

That was my original guess but I then second guessed myself! Doh!

heretolearn_2

It's being phased in over a couple of years - starting with larger employers, and the rest will be done in batches according to their PAYE registration numbers (although a few small employers will be picked at random to pilot the scheme). It's compulsory to offer a scheme, all employees are automatically enrolled and have to opt-out if they want to leave, and then every two years they are automatically enrolled and have to opt-out again. Lots of restrictions on employers - not allowed to encourage opt out in any way or even provide opt-out info to employees!

Googlewhacker

heretolearn wrote: »

It's being phased in over a couple of years - starting with larger employers, and the rest will be done in batches according to their PAYE registration numbers (although a few small employers will be picked at random to pilot the scheme). It's compulsory to offer a scheme, all employees are automatically enrolled and have to opt-out if they want to leave, and then every two years they are automatically enrolled and have to opt-out again. Lots of restrictions on employers - not allowed to encourage opt out in any way or even provide opt-out info to employees!

In the end what will happen is that employers will have to provide as part of the contract a pension scheme that forms part of the contract and is non negotiable.....mark my words!

I presume you can tell staff that you are allowed to opt out of it

Mudd14

Its going to be a complete nightmare for some areas such as hospitality where staff turnover is very high and 99% of the employees will not want to be in the scheme and do not understand how to opt out.

I ahve been part of the pensions reform consultation, they havent really addressed any of my points in my reply! Useful!

As far as opting ut goes it is not quite clear what the employer can do, currently the white paper says there can be no influence from the employer regarding opting out. The forms will come from the providor.

I could seriously write about this for hours but i will only get angry lol

paulwf

Mudd14 wrote: »

Its going to be a complete nightmare for some areas such as hospitality where staff turnover is very high and 99% of the employees will not want to be in the scheme and do not understand how to opt out.

I ahve been part of the pensions reform consultation, they havent really addressed any of my points in my reply! Useful!

As far as opting ut goes it is not quite clear what the employer can do, currently the white paper says there can be no influence from the employer regarding opting out. The forms will come from the providor.

I could seriously write about this for hours but i will only get angry lol

I agree, this appears to be like most employment legislation - designed for people in one job that they see as a long term career.

At the moment employers with more than 5 staff have to offer a pension scheme, in catering I know of companies with 500 staff without anyone taking it up...I just can't see the demand for it.

Something does need to be done about pensions but not at the company level, small businesses haven't got the resources to explain pension schemes to employees properly, and in sectors like catering where as the previous poster states there is a very high staff turnover it just isn't going to work well.

Savvy_Sue

It's not even where there's a high staff turnover that there will be problems.

I'd like to know HOW employers are supposed to 'force' people to sign up for this - I'll explain.

We offer a stakeholder pension. Employer pays 2% of gross into the plan, no strings attached. HOWEVER, each employee needs to complete a simple (?) form to be signed up, and show ID. You might wonder why this would be a problem - employer is offering free money for your retirement, why would anyone NOT sign up?

And yet, it takes MONTHS for me to persuade new members of staff that this is A Good Thing, and to bring ID in, and to fill in the form. Why? Partly because of the pages of documentation which come with the form, explaining the different funds and the investment policy.

So if it was COMPULSORY for us to sign people up, how would we do it? And at what point? I wait until probation has been completed - we've had a few people leave before this, but not many - but make sure they KNOW it will be available at that point.

I'm dreading it, but sure it's coming ...