We may just have been nudged.
We’ve been getting interested in salary sacrifice. We have been building a salary sacrifice modeller into the workforce assessment tool on http://www.pensionplaypen.com by popular demand.
Initially I had thought salary sacrifice was benefiting employers but following my recent blog on accounting web, I got this tweet.
If this is true, (Ceridian are both reliable and one of the major software suppliers to the payroll industry), then this is important.
Auto-enrolment contributions in the first years of phasing are so small they have hardly disturbed the surface tension that maintains inertia!
But we are still in a period of acclimatisation for many employers and their auto-enrolled staff. While the implementation went well, they are still getting used to the temperature of the water!
But as smaller organisations become more confident, switching to a salary sacrifice arrangement may be the next stage in the process.
And we are very much in virgin territory now.
Those who think that DB provided universal protection to workforces large and small are kidding themselves. DB take up was typically targeted at higher earners and those with low but stable earnings were often disadvantaged if they did join by offsets which depreciated the value of benefits.
Most of the employers still to stage auto-enrolment have never offered a DC let alone a DB plan to staff so any pension contribution is a step in a new (and to many dangerous) direction.
If we can encourage employers to go the extra inch by adopting salary sacrifice, if it gets them and their staff engaged in the workings of pension contributions, then we are another nudge closer to an adequate contribution.
This is how you boil frogs, turn the heat up slowly and eventually you can turn it up faster.
Frog-b0iling may not be as politically acceptable as nudging but it comes down to the same thing. To get to adequate pensions for all we need to nudge and keep nudging and we needs always be careful not to alarm the frogs who still have the energy to jump out of the pot.