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REC responds to Government's pensions plans

REC responds to Government's pensions plans

The Department for Work and Pensions (DWP) has published regulations this week which clarify how new pensions requirements which will be introduced in 2012.

In response to these regulations, Anne Fairweather, the Recruitment and Employment Confederations Head of Public Policy said: "The REC has long been concerned about how these new requirements will interact with the fast paced environment of temping. From 2012,
recruitment agencies will, for the first time, be automatically putting temporary workers into a pensions scheme, from the first assignment they are placed in.

The REC has raised concerns about how this will work in practice, with temporary agency workers often moving between agencies and sometimes only completing very short assignments.

"The REC still believes that these new rules need to apply to all recruitment agencies at the same time. The current intention to stage in the scheme by size of payroll will confuse workers and agencies alike. Now the serious work of producing a pension scheme which interacts with the temping market, and a regulator who can respond effectively to those businesses who are not complying with their obligations, needs to begin."

Commenting on the proposals, Anne Fairweather made the following points:

On staging dates: "The DWP has proposed that employers should be included within the scheme over 4 years based on payroll size. This is very disappointing for the recruitment industry where the cost of agency staffing is directly related to the pay rate and employment costs associated with the worker. Workers will not understand why some agencies place them in pensions whilst others do not. In addition to that, the competitive advantage that those companies who do not need to automatically enrol their workers will be distorting."

On registration: "The REC supports the reduced bureaucracy involved in the registration process but still highlights the need not to assess risk in the recruitment sector on this basis. Recruitment agency payroll numbers will vary week by week, as will contributions rates. For the Pensions Regulator to be effective other ways of assessing risk in the recruitment market are needed."

On record keeping: "The REC welcomes the move to simply record when a worker opted out of the pensions scheme, rather than a signed copy of their opt out. In the recruitment market where there is a large churn of agency workers and the need to keep more information than this could have lead to costly storage problems."

On inducements and prohibited recruitment conduct penalties: "Now that this matter has been resolved in the regulations the Pensions Regulator and DWP need to move to illustrate how this regime will work in practice."

On the 19 day rule: "The REC welcomes the extension of the 19 day rule for those workers who are being automatically enrolled. This is vital for recruitment agencies who will be automatically enrolling people every week. Now initial deductions for pension contributions can be kept in a separate account until the opt out period has passed. This has halved bureaucracy for agencies where it is thought that many temps will opt out of the pension provision."


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