Financial advisers from across the West Midlands attended a course on auto enrolment yesterday – the new regime for workplace pensions that has begun to roll out.
Hosted by Personal Finance Society chartered chairman for the region, Ben Rees, the keynote conference was held at Birmingham Airport’s Holiday Inn and featured training workshops by leading UK experts – designed to give local advisers a head start on advising company owners who need to act now.
Mr Rees, director of Henley-in-Arden-based Denehall Wealth Management, is a pensions expert for a leading consumer finance website and already advises various Chambers of Commerce across Birmingham and the West Midlands on Auto Enrolment.
Auto-enrolment is a scheme backed by the government that will see all but the very smallest UK firms required to operate a company pension scheme. It is designed to supplement the state pension and any private pension employees have to increase pension savings and reduce dependency on the state as life expectancy in the UK increases.
Companies with more than 120,000 employees have been running a scheme since October last year, but by the end of 2013 all firms with more than 500 employees will have to run one – until finally firms with fewer than 58 employees will have to run an auto-enrolment scheme, to be set up in stages from February 2015.
Mr Rees says: “The latest research shows that last year over 100,000 people opted out of their current company pension schemes, taking the total enrolled to just 2.9 million, the lowest level since 1953. In terms of paying for life expectancy in the UK, far-reaching reform like this was definitely needed and, put simply, auto enrolment is designed to get firms that don’t run company pension schemes to operate one.
“Auto Enrolment is here, it’s compulsory for every employer regardless of size, the regulator is going to be monitoring small employers closely for non-compliance and, most importantly, there simply aren’t enough qualified advisers out there to cope with the demand. Employers need to act now, at least 12-18 months before their staging dates.”
“We have already been advising larger company owners on their auto enrolment duties and criteria, compliance issues, existing schemes and setting up new ones, plus how they can make the most of auto enrolment now it’s here to stay.”
Auto-enrolment pensions will be paid for by a combination of employee and employer contributions and tax relief from the government, although employees do have the option of opting out.