We ask the experts for their answers … have your say online at the Employee Benefits forum.
James Churcher is pensions manager at the Telegraph Media Group
There is still consensus among politicians about auto-enrolment. Some Conservatives have suggested that, if anything, the phasing-in process between 2012 and 2016 is too long.
Auto-enrolment presents serious challenges, and we need to plan immediately. Employers with many workers currently outside their pension schemes may have to finance significant increases in membership and total contributions. They must also decide whether current non-members will be auto-enrolled into the company scheme or into a minimum contributions alternative.
Communications should be planned well ahead. Short-term thinking and scepticism about pensions may make some employees opt out unwisely. Contrastingly, some low-paid staff who will be covered by the minimum income guarantee will not realise they are better off to opt out. As staff cannot ask not to join, they cannot get out until they have been entered in.
If there is a change of government, the detail of the national employment savings trust (Nest) may be reviewed, but there will still be a scheme. We have to trust that the Personal Accounts Delivery Authority would not spend more than £300,000 of public money in rebranding without grounds for confidence that Nest will not be cancelled soon.
Pensionable earnings will include bonuses and overtime. Employers running defined contribution plans using only basic salary will have to compare whether minimum contributions based on band gross earnings are more than existing contributions based on a percentage of salary. If we wait for the election, and for the later Finance Act, some employers will find Nest falling on them scarily quickly.
Joanna Searle is corporate and employer relations manager at The Pensions Regulator
The quick answer might appear to be no. This significant change in pensions will not start until October 2012, when the largest employers in the UK will start automatically enrolling their employees into a qualifying pension arrangement, of which the national employee savings trust (Nest) will be one. Over the period to 2016, employers will gradually be brought into their new duties.
However, although these reforms may seem far away, it is not too early for employers to start making themselves aware of the changes to come. We will be publishing a leaflet this spring which will set out the key facts employers need to know. Over the course of the coming months, our website will provide guidance to enable employers and other key participants in the reforms to plan ahead.
Employers should start thinking about the decisions they will need to take: whether it is to set up new arrangements (which they could do at any time before 2012) or to consider changes to the pensions provision they already have in place. Indeed, employers should be seeking to maintain high-quality provision where they can, as well as ensuring that the administration of those arrangements meets our current expectations, for example, good communications with employees and paying contributions on time.
All this is key to having the right foundations in place for 2012. All employers, especially small businesses and those that have not engaged in pensions before or had a business relationship with the regulator, can rest assured that they will be guided by us and in good time before 2012.
Joanne Segars is chief executive of the National Association of Pension Funds (NAPF)
The 2012 reforms will reshape retirement provision in Britain. They will give almost every working person a right to be auto-enrolled into a pension scheme with an employer contribution. Seven million people will have access to a workplace pension for the first time.
The national employment savings trust (Nest), the new, giant, quasi-state pension, has attracted the headlines, but that is only part of the story. The big news for employers which already have pension plans is auto-enrolment. No matter what colour government is in power, auto-enrolment is almost certain to go ahead.
But it must be introduced in a way that is simple for employers and their HR and payroll departments. That is why we are lobbying the government to adopt a more common-sense approach to the regulations. If the government does not do this, there is a risk some employers will level down their existing arrangements to the new statutory minimum contributions.
Nest is being established for employees who do not have access to a pension scheme in their workplace. If the Conservatives win the election, they say they will undertake a review of Nest. Any such review must be limited. We cannot afford further delay, which would be costly to the retirement saving of millions.
Post-2012, the pension environment will be very different. The reforms will affect almost every employer in the land, including those that already run good-quality schemes and will have to change their definitions of pensionable earnings, and change to auto-enrolment. A change of government will not necessarily mean a change of tack, so employers and HR professionals would delay starting preparations at their peril. Should firms plan for pension reforms before the election?