I refer to your article Calculating the cost of auto-enrolment (August 2013).
The summary opines that: “An investment is being made, so employers should make sure that there is value in that investment by communicating with, and educating, employees.”
I have to take issue with this. There is no question of this being a [pension] investment since, from the employee’s point of view, an identical product has to be provided by every other employer. What return can the employer possibly expect from this investment?
In essence, an employer’s auto-enrolment contributions are no more than a payroll tax and can properly be equated with employers’ national insurance. In my view, any employer that voluntarily contributes more than the statutory minimum is putting itself at a competitive disadvantage.
Richard Fleet is tax and pensions manager at Sir Robert McAlpine
