It’s employers that did it! Rudd should be thanking them for “her” policy success

 

 

good boss bad boss

 

I’m pleased to see that attempts to re-write history by the Conservative party have been foiled by the ever-vigilant Cumbo.

We should also remember the part Labour played in the reforms.

And most importantly, auto-enrolment came from a cross-party consensus.


Heroes and vilains

Amber Rudd’s assault on bosses who put themselves and shareholders before pensioners is an example of a politician biting the hand that feeds.

It was employers, large and small, who coughed up for the technology and the implementation of new processes to implement auto-enrolment. Employers were the ones who shaped AE rules so they became workable and it is employers who are stumping up a great proportion of the contributions that make auto-enrolment matter.

If there is a current villain of the piece it is Her Majesty’s Treasury which is operating a system of tax reliefs on personal contributions that aren’t giving promised incentives to those on low-earnings and are making it extremely hard for many on high earnings to claim back higher rate tax.

The “hard-working people” that Rudd addresses in her Telegraph article are all too often getting a raw deal from the Government that claims to be protecting them.

This Government’s is reluctant to get to grip with the net-pay scandal or provide help to those who pay higher rate tax, pay into relief at source pensions and have no self-assessment.

It is damaging the pensions of many low and middle earners to a much greater extent than the shenanigans of Philip Green and the Carillon board.

The heroes of auto-enrolment are the employers who almost universally complied, in particular the payroll functions that did the heavy lifting to get AE in place across more than a million employers.

Dumping on these employers as Rudd did this weekend and in the subsequent paper produced by the DWP yesterday, is disgraceful.

 


It was not always thus

Sir Steve Webb and Baroness Altmann, who presided over the formative years of auto-enrolment took an active interest in the problems employers were experiencing as they took auto-enrolment on board.

I  remember Webb receiving a delegation of payroll specialists , listening to their arguments around assessment periods and changing legislation to help them. Webb regularly came to meetings of the Friends of Auto-Enrolment.

Altmann was also keen to listen, assembling regular meetings with payroll specialists to hear what was going right and what wrong.

Both Webb and Altmann are now actively involved with organisations (Royal London and PensionSync) who continue to make employers lives a little easier. This kind of practical assistance has not been repeated since they left office.

Employers have every right to be offended both by the tone and language of Amber Rudd’s statements over the weekend and the annexation of auto-enrolment into Conservative Party Political broadcasts.

I am a paid up member of the Conservative party and I call foul on this chicanery.

It was not always thus, let us hope we can return to earlier years in this century when pensions were not used as a political football.


Employers are key to second pillar pensions

Employers set up DB pensions for social good and the particular good of their staff.

Employers fund these schemes in compliance with Government guidance. Non-compliance is extremely rare.

The failure rate of employers with defined benefit pension schemes is not an issue for the PPF which is strong and getting stronger.

Employers were and are critical to the success of auto-enrolment.

Employer compliance with AE regulations has been exemplary. Scaremongering that they would not rise to the occasion between 2010 and 2017 proved totally wrong.

Instead of thanking employers, this Government seems intent on appropriating their successes and denigrating bosses as “fleecing their staff”.

I hope the CBI , FSB and other employer groups will have none of this. Without employer’s, Government policy on pensions would be broken. There are still big holes in its policy (such as the tax-treatment of contributions). Government continue to pour money into institutions such as NEST and SFGB, pursuing white elephants like Pensions Wise and failing to get to grips with the problems highlighted by FAMR and the Retirement Outcomes Review.

Employers remain the trusted source of information for most workers. The SFGB and the Government Pension Scheme are not. So long as Government carries on as it is at the moment, it will try the patience of those that have supported it. That patience will at some point break.

Employers coping

A report by NEST in the midst of auto-enrolment. 

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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