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PRO INSTALLER AUGUST 2015
PRO NEWS
@proinstaller1
RISE IN SMALL
FIRMS OFFERING
BETTER PENSIONS
In line with new workplace pension’s law, every employer with at least one member of staff now has a new duty
to enrol those who are eligible into a workplace pension scheme and are also obliged to contribute towards
it. This is known as automatic or auto enrolment, it is automatic for the employee, not for employers.
With over 1.2 million small
and micro firms yet to tackle
auto enrolment, new research, undertaken by BDRC
Continental and workplace
pensions provider NOW:
Pensions reveals that the
number of employers in the
construction sector planning
on contributing more than
the legislative minimum has
increased significantly in
the past year.
Of the 400 SMEs surveyed, 42%
of firms in the construction sector
say they plan to, or will consider,
contributing more than the legislative minimum when they enrol
their employees into a workplace
pension. This compares to 24% of
SMEs in the construction sector
surveyed last year, according to
BDRC Continenal.
Of those that intend to be more
generous, 15% say they plan to
pay more than the minimum
from the outset with a further
14% stating that they will pay the
minimum initially, with a view
to increasing contributions over
time. This is an improvement on
2014 when just 1% of SMEs in the
construction sector surveyed said
they intended to pay more than
the minimum with a further 23%
stating they will pay the minimum
initially with a view to increasing
contributions over time.
Waking up to the
benefits of a more
generous pension
Nearly half (46%) think the
minimum contribution has been
set too low for a comfortable
retirement while 44% hope
that by contributing more, their
employees will be encouraged
to do the same. Nearly a third
(35%) of those surveyed in the
construction sector, who intend
to pay more than the minimum
say they believe it will help with
the recruitment and retention of
employees. One in five (22%) say
they don’t offer any other benefits
so are happy to spend a bit more
on providing a more generous
pension while 20% think the cost
of a larger contribution is small
compared to the long term benefit it will provide.
Of all the companies surveyed
in the construction sector, 36%
say they think offering a good
quality pension helps with employee retention while 32% think
it helps to improve the attractiveness of the company to potential
employees.
Morten Nilsson, CEO, NOW:
Pensions said: “The perception
is that large firms offer more
generous pensions than small
companies but, this isn’t necessarily true. Many small employers
in the construction sector want to
offer their staff a benefit they’ll
genuinely value and are willing to
put their hand in their pocket to
do so.”
Compliance top
of the agenda
Of the 43% of firms in the
construction sector that plan to
make minimum contributions,
over half (57%) say it is because their focus is on ensuring
compliance while 43% claim
they want to keep things simple
and think paying more would
complicate matters. A further
14% say keeping costs low is a
priority while an honest 9% say
they don’t really want to offer
a pension at all so plan to keep
costs as low as possible.
Nilsson continues: “There’s a danger that, because the government
has set the contribution level, employers will assume that auto enrolment minimum contributions are
sufficient to provide a comfortable
retirement for their workforce.
“The reality is that even when
auto enrolment is fully rolled out,
a combined pension contribution
of 8% still isn’t going to be enough
for most people. If employers
contribute even a small amount
more than they are obliged to do,
this can make a big difference to
employees’ final pension pots.”