Postpone pension auto-enrolment, IoD urges government
Employment Law & HR update 24/11/2011
Currently, employees will begin to be automatically enrolled
onto pension schemes as of October next year.
However, The Institute of Directors (IoD) is now calling upon
the government to delay the phased roll out of auto-enrolment
pensions until 2014.
The body has made the move as it feels that the regulations will
reduce spending power at a time when employee's incomes are already
being chipped away at by inflation.
The IoD also feels that any potential pay rises could be
sabotaged by the additional pension contributions employers will be
obliged to make. Research carried out earlier this year found that
one third of IoD members were planning to freeze staff salaries in
order to make up the new pension contributions.
Director General of the IoD, Simon Walker, told Workplace Law,
“This is the wrong time to be implementing pension auto-enrolment.
It is not too late for a change course – if the government defers
auto-enrolment at next week’s Autumn Statement, it will have done
so before most businesses have even considered the impact of the
“The IoD proposes that the government delay the introduction of
auto-enrolment by two years. This would give businesses time to
strengthen their balance sheets while not undermining consumer
spending when it’s at its weakest,” added Mr Walker.
The body also believes that, should firms want to push ahead
with the roll-out, they should be able to do so voluntarily, but
should not be forced into doing so by the government.
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