For many compensation and benefits professionals, 2012 and the introduction of personal accounts — the government’s new national pensions savings plan — seems a long way off.
Yet it is one of many challenges benefits experts will face over the next couple of years. Employers will have to contribute 3percent of each employee’s total earnings, including commission and bonuses, into either a personal account or an existing workplace pension scheme.
The sooner that benefits professionals begin analysing their current provision and ascertaining how their organisation’s pension costs will increase and whether their existing schemes will qualify to be exempt, the better.
But the scale of the task is daunting. Only 17percent of delegates at the Employee Benefits Summit 2008, held in Spain last month, have begun to review their existing provision ahead of the arrival of personal accounts. Following a panel discussion about personal accounts, 67 percent said they would have to make changes to their organisation’s pensions provision come 2012. And 89percent thought personal accounts would prove to be an administrative nightmare for employers.
Another challenge facing Summit delegates, and compensation and benefits professionals generally, is the state of the economy and its impact on pay and benefits. While the Chancellor, Alistair Darling, continues to urge employers to limit wage settlements to the government’s inflation target of 2percent, this could be unrealistic for some employers when faced with industrial action, as has proved to be the case for Shell.
As regards benefits, some HR experts are reviewing their fleet policies to take account of rising fuel prices and are considering limiting vehicle choice to cars that are more fuel-efficient, tightly monitoring fuel usage, and being more accommodating over homeworking requests. Others may well be advised to consider how to build added value into perks by boosting staff appreciation of their benefits package through increased communication and offering low-cost extras.