Scaremongering

Scaremongering sells newspapers and we love to be afraid. It is easy to write stories that play on our fears, because they are the ones we want to read.

But that doesn’t make scaremongering alright, just as it doesn’t make pornography alright.

Auto-enrolment scaremongering

Awareness of auto-enrolment is high and getting higher. The Pension Regulator’s letters are now all out and, as they come in envelopes that look like they’re from HMRC, they have generally been opened.

Accountants are aware that they are going to be the first port of call for worried clients, payroll software houses are building ever more complete compliance systems and every trade body from the ICAEW to the institute of hairdressers is talking the talk.

We have reached that tipping point where the business world is either in or looking in. Campaigns such as Accounting Web’s “no-one gets left behind” and the Friends of Auto-Enrolment’s “capacity crunch” have given momentum to auto-enrolment precisely when it is needed- now!

What’s needed is not scaremongering about fines but a reasoned argument on why employers should engage, get educated and empower themselves to do a good job for their staff.

“We can’t be bothered with pensions”?

I simply do not buy the “we can’t be bothered with pensions” arguments being promoted by the compliance specialists. Employers know very well that if their staff don’t save regularly decent amounts of pay for later life they will get left behind and face an uncertain financial future in later years. Why wouldn’t you want to help your staff help themselves?

Since the bulk of the costs of auto-enrolment are tied up in ongoing contributions, why don’t we – by which I mean the whole panoply of intermediaries who stand between people and their retirement savings- start treating pension contributions as pay. For that is what they now are.

Those people who don’t want to be paid, can opt-out, but there is no financial alternative on the table (unless the employer is wilfully massaging up opt-out numbers).

What is more, the pay that people are taking by way of contributions into workplace pension plans is invested and people have a right to know how and why the investments have been chosen. It is their pay.

Employers – even the micro micros who may not think of themselves as such, when presented with the chance to help out those who work for them, are going to worry a little about this investment decision, not just because they feel responsible but out of genuine concern for the people they work with.

We can be bothered with pensions!

We are not a nation of Gradgrinds with no humanity towards our staff. We do not want to be fined for not doing auto-enrolment right , not just because of the financial penalty but because it is embarrassing to be seen as incompetent and worse uncaring by our staff.

I suspect that those who are making the noise about not caring are a very small minority who find it easy to make a large amount of noise. Cynicism is easy on the ear, sit in any cafe or pub and hear how people chat. We love to have a moan!

But to suppose that people are apathetic about old age and – when presented with the opportunity to help their staff and fellow citizens to a better later life – that they won’t give a toss – is nonsense.

We need to get beyond thinking of auto-enrolment as the alternative to getting fined and to start thinking of it as an investment opportunity for millions of people previously excluded from workplace pensions.

Is it naive to suppose that people actually enjoy being in a pension scheme – no matter how meagre the contributions? Is it possible to think these people will be more productive knowing that they are doing something to sort their retirement headaches? Is it possible that people will look at employers who do give a toss about the investment of their staff’s money and want people who work for them to engage , get educated and be empowered for the future?

A job worth doing…

In my opinion it is both possible and very likely that given the choice between doing a job properly or doing it badly, most people would want to do the job well.

The job of those who stand between people and their retirement savings is to make the job of doing it well as easy as possible.