Smaller employers with past experience of successfully implementing legislative changes in the workplace have named external advice as the key ingredient of a smooth transition.
The Department for Work and Pensions (DWP) has published a survey of 28 companies with 1-49 employees, which have gone through the process of implementing change in the past.
The research was conducted in anticipation of the introduction of the government’s Personal Accounts scheme (PAS), which will provide a workplace pension scheme for all employees in the UK.
Based on their experience of implementing previous legislation, all 28 of the companies surveyed recommended consulting financial advisers, accountants and software designers in order to assess costs, consider options and upgrade systems.
What will the costs be?
The principal costs they expected from the Personal Accounts Scheme included increased employee participation due to the requirement that all employees be ‘auto-enrolled’ into the workplace pension scheme at the beginning.
Of the companies with a pension scheme already in place, most said they had only partial participation, as pensions were reserved as part of a retirement planning package for company directors and higher salaried staff.
The companies surveyed predicted that in addition to the contributions they would make under the Personal Accounts scheme – equivalent to 3% of each participating employee’s salary – they will also face the cost of upgrading administrative systems to deal with automatic enrolment, and adjusting payroll systems to process contributions and refunds.
*DWP: ‘Understanding small employers’ likely responses to the 2012 workplace pension reforms’
