It pains me to hear advisers talk of auto-enrolment as a “burden”.
Helping to provide a retirement fund from which your staff can draw a pension seems to me a good thing for employers to do. If the phrase “human resource” has any meaning, an investment of this nature must have a positive impact on the goodwill within the workforce.
Why would an employer not want to maximise this good will by doing a proper job of selecting, implementing and managing the workplace pension? After all, if every employer has to set up a pension, then the only commercial advantage that can be gained, is in doing it properly.
One of the unfortunate consequences of the phasing of contributions has been to downplay the scale of the investment that employers will make, not just on their behalf, but on behalf of their staff.
Even if minimum contributions remain unchanged at 8% of band earnings (and there is strong pressure to increase them), they represent over time a significant commitment from both parties. There is also a significant amount of tax relief at stake.
Paying no attention to the pension is short-sighted. In Australia, where individual balances from “Super” now form significant portions of individual and collective wealth, the Super Funds into which the nation’s wealth are invested are coming under a lot of scrutiny. So is the decision making of employers for choosing one fund over another.
Employers who simply plump for NEST without researching other options are at best cavalier, at worst quite feckless with their and their staff’s money. Similarly employers who are advised into spurious arrangements set up by two-bit advisers (that subsequently fail) are going to need to justify on what basis they put staff money at risk.
I am not saying that NEST or adviser-centric master trusts won’t work, I am saying that the significant investment of an employer and staff money requires due diligence.
There is not much of an investment that needs to be made , for an employer to complete a market search and properly document how it came to the decision it did. Employers who use Pension PlayPen need only pay £499 to ensure they have covered all the bases.
Making virtue of a necessity is commercially viable for even the smallest of employers. For advisers, a sum as small as £499 represents little more than the cost of rendering a recommendation compliant. To produce an end to end service culminating in a 40 page report with actuarial certification for less than £500 is unfeasible- unless such reports can be generated on an industrial scale.
But technology permits bespoke reporting and this reporting is now available.Whether you are an employer or an adviser, it is worth making the extra effort, to pay attention to the pension and choose a workplace arrangement right for the organisation and right for its staff.
www.pensionplaypen.com offers any employer – any adviser- access to the highest quality of research and an audit trail to future-proof the selection – for just £499 (+vat).
If you would like to know more (and have taken the trouble to read this far) feel free to drop me a line on henry.tapper@pensionplaypen.com , I promise to mail you right back, and if you leave me a contact number, to call you to help.
