John Lewis says auto-enrolment is ‘wrong for us’

NAPF: John Lewis Partnership’s head of pensions, Dinesh Visavadia, has slammed the inflexibility of auto-enrolment legislation because of its disconnect with the organisation’s business strategy. 

Speaking at the National Association of Pension Funds’ (NAPF) annual conference in Liverpool on 19 October, he said: “It is the wrong kind of legislation for us.”

Visavadia also said The Pensions Regulator’s focus is short-term, which is one of a number of the organisation’s barriers to auto-enrolment. Others include the administrative burden of calculating employees’ pension contributions, particularly for employees who only work for the organisation for a short period of time.

Visavadia explained that John Lewis Partnership is required, under a self-imposed constitution, to provide for the retirement needs of employees who have spent all, or most of, their working lives with the organisation.

Access to a non-contributory defined benefit (DB) scheme is offered to employees after three years’ service.

“We prefer to focus our pensions spend on longer serving partners,” he said. “We have a long-term financial commitment, but regulatory pressures potentially impose short-term cash demands.”

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He adds: “Provided we meet the minimum qualifications for auto-enrolment, why can’t we be free to provide pensions in the shape we want?”

Visavadia’s pensions regime wish list includes:

  • a predictable and sustainable benefit that’s affordable in a wide range of economic scenarios.
  • the right balance between investment in the business and profit to employees through bonuses and pensions.
  • the highest level of pensions, focused on longer serving and lower paid employees.