Fears of pension reforms confusion

CHANGES to the timetable for the biggest workplace pension reforms in generations will cause huge confusion for employers, the National Association of Pension Funds (NAPF) has warned.

Under rules coming into force from October 2012, workers aged between 22 and 65 and earning more than £7,475 will be automatically enrolled into a company pension or, if there isn’t one, into a government scheme.

Companies with 50 employees or fewer now have until May 2015 to comply with the new rules, rather than April 2014 as originally planned, under amendments set out by the government last Monday. Firms with fewer than 3,000 employees may also be given a later start date.

But Joanne Segars, chief executive of the NAPF, told Scotland on Sunday that the changes were unhelpful. “It is very disappointing because it won’t all be phased in until 2019 now. We need to urgently solve the pensions crisis, and this is a long timezone.

“There’s also confusion because everything is up in the air for bigger firms with 3,000 employees and under. They need to know their start date.”

Segars claimed the government is doing too little to boost pensions in the private sector. “Auto-enrolment is still broadly intact but we need more work on invigorating occupational pensions.”

Talks with the government over plans to encourage pension funds to invest in infrastructure projects are at an early stage, Segars added.

The initiative was confirmed in the Autumn Statement but the level of pension fund interest depends on how the deal is structured, she cautioned.