Pensions enrolment is automatic, choosing a scheme isnt Says Outsauce
Pensions enrolment is automatic, choosing a scheme isn’t Says Outsauce
Recruitment Agencies placing temporary and contractor workers and umbrella service providers not putting enough effort into choosing pension provider, according to Outsauce
Auto-enrolment (AE) is one of the biggest challenges of 2013, yet 45% of recruiters are confused by the available solutions, and just over half are yet to develop processes to meet legislative requirements. These worrying figures were revealed in the Compliance Barometer, a recent survey of UK recruiters commissioned by Outsauce.
Recruiters blame ambiguity and overly complex technical language on the part of some pensions providers. “This is a recipe for poor business decisions,” says Andrew Webster, Outsauce. “In an atmosphere of uncertainty, there is a natural temptation to delay your choice until a popular solution emerges. But blindly following the herd means ignoring the individual requirements of your business, which will come at a cost.”
Currently, the market appears to be favouring schemes from NEST, the National Employment Savings Trust, but there is concern that recruiters and umbrella providers are failing to understand the true range of options available and their implications.
“Selecting a pension scheme may be obligatory, but your choice of provider is not,” says Steve Dent, Founder of the Contractor & Freelancers Association. “There are numerous options out there, and you should take the time to discover which is most suited to your business and your way of working – just as you would with any long term investment.”
It is not just umbrella providers and recruitment businesses that have a responsibility to their temporary workers and contractor freelancers.
“If you’re an agency referring your contractors to an umbrella, check the pension scheme the company is implementing to make sure it is suitable and compliant, alongside the company’s strategy to deal with the accompanying administration and employers’ contributions,” adds Steve Dent.
Fortunately, smaller agencies still have some time before their staging dates to get their houses in order. For umbrella providers, many of which are classed as large employers, the clock is ticking.
In conversation with recruiters, Outsauce has learned that at least some umbrellas and agencies are predicting candidates will opt out. Off the record, many confess they are hoping that the prospect of a reduction in pay in a double-dip recession, even one as modest as three per cent, will be sufficient to dissuade workers from staying in a scheme. “If you like to gamble, bet that some of your candidates will be considerably less passive when it comes to securing their future,” adds Andrew.
Outsauce’s free Compliance Barometer: http://www.outsauce.net/compliance-survey
Auto-enrolment guide: http://www.outsauce.net/resources/