Employers Must Engage With Changes
The government’s plans to introduce an auto-enrolment system in relation to workplace pension schemes was always going to lead to significant changes that companies would need to prepare for, according to a pensions expert at Irwin Mitchell.
Concerns have been raised in relation to the complexity of the scheme, which is expected to be brought into force in October, with the National Association of Pension Funds describing the rules as “eye-wateringly complex”.
The organisation added that many employers are worried about how they will implement the system and claimed the government had designed them specifically to ensure companies would not try and get around the legislation.
Nigel Bolton, a Partner at Irwin Mitchell’s Leeds office, specialises in providing advice to employers in relation to pension issues.
Commenting on the NAPF’s concerns, he said: “Overall, there is a strong argument that the rules could have been simpler, but it must be remembered that this is the biggest change to pensions saving since the Second World War.
“Because of this and the aim to make the rules comprehensive, it goes without saying that many employers will need to transform their long-held working practices. For example, the most fundamental issue for most companies is that their HR and payroll systems are not going to be fit for purpose and will need to be upgraded or replaced.
“The payroll industry hasn’t got to grips with this until late in the day, despite the Pensions Regulator running an awareness campaign with payroll providers since the start of this year.
“Employers need to engage with this 12 -18 months ahead of their staging date as upgrading or replacing their systems is simply not an overnight job. Proper planning can create opportunities for business, not just throw up problems.”