Employees given new protection in pensions shake-up

b12-688 Scenesetter of coins / money for pensions feature.
b12-688 Scenesetter of coins / money for pensions feature.

EMPLOYERS have been banned from inducing or offering incentives to staff or prospective employees to abandon retirement saving.

The rules, which came into effect on July 1, mark the start of workplace pensions reform.

New duties will eventually see all UK employers – including small businesses – automatically putting certain staff into a pension scheme and making contributions to that scheme.

New rules on inducements or offers apply to both existing workers and potential new recruits – for example making a job offer or higher salary conditional on not joining the employer’s automatic enrolment scheme. Workers can report concerns that the rules are being broken.

To help employers fulfil legal duties to write to all workers about automatic enrolment, a range of material has been unveiled by the Department for Work and Pensions and The Pensions Regulator.

Employers can use an online tool to select the right letter to suit the circumstances of their workers.

There are supporting template posters, content for employee bulletins and other tips including a pensions language guide and myth-buster in the DWP employer communications materials.

Minister for pensions, Steve Webb, said: “Workplace pensions reform will mean millions of people will be better able to afford the plans they have for retirement – so it’s crucial that they know how the changes affect them.

“Giving workers information about automatic enrolment will be the duty of employers, and the templates will make it as simple as possible for them to keep their employees up-to-speed on their pension entitlements.”

Charles Counsell, the regulator’s executive director for employer compliance at The Pensions Regulator, added: “We’re prioritising educational tools and guides to prepare employers for their new duties.

“But employers should be under no illusion that we will take action against any tactics to tempt or pressurise staff to opt out of pension saving, whether it’s during the recruitment process or after. This could include a substantial fine.”

Between October 2012 and April 2017 employers will be required in stages to automatically enrol all their eligible jobholders into a qualifying pension scheme and make contributions to the scheme.