Pensions race against time for Scotland’s offshore oil and gas firms

SCOTLAND’s oil and gas companies are in a costly race against time to enrol workers automatically into a new generation of pension schemes after an exemption given to them was controversially scrapped by the government.

Experts say the Scottish offshore industry may have to pay up to £7 million a year to comply with auto-enrolment, amid claims the sector has been disadvantaged compared to other industries that have had longer to prepare for the pension changes.

The government originally excluded the offshore and shipping industries from the requirement to automatically enrol all employees from this October, but changed its position just before Christmas.

Pensions and actuarial consultants Punter Southall has identified the price tag for Scottish offshore employers as a proportion of the £17m total it is expected to cost for the UK’s 26,000 oil and gas and shipping workers not currently covered.

Grahame Cooper, principal of DC Consulting at Punter Southall in Aberdeen, said: “The introduction of automatic enrolment from October this year is the most significant change to the UK’s pension system for a generation.

“Employers throughout the country are still struggling to come to terms with the new regime to ensure they have the necessary systems in place to comply with the auto-enrolment requirements.

“The offshore and shipping industries will be particularly hard hit as they have a much tighter timeframe in which to adjust to the new system.”

Cooper added that the offshore gas and oil industry “may also need to consider workers who are non-UK nationals as many may have difficulties when they retire with an auto-enrolled UK pension which will be subject to potential tax and currency issues in their country of residence”.