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06/07/2011
Radical Pension Changes To Affect Local Businesses
Private sector employers need to take action now to prepare for a significant overhaul of employee pension provision or face playing catch up on one of the biggest issues to impact the business community for decades, according to a leading UK pension’s expert.
Robert Birmingham Managing Director of Xafinity Consulting who advises some of the UK’s leading businesses on pension provision made the call following a seminar attended by Northern Ireland business leaders. It follows radical changes which are due to come into force next year governing the way pensions will be provided by private sector employers. From October 2012 all employees earning over £7,475 in Northern Ireland will be automatically enrolled a pension scheme.
Mr Birmingham said that the implications of the new arrangements for pensions are far reaching and the most significant changes to take place since the introduction of state pensions back in 1909. He added: “The biggest changes will be faced by companies which currently do not have pension arrangements for employees where the employer contributes. A recent study by the Institute of Directors found that the 2012 deadline is likely to impact small businesses most with 43 per cent indicating that they don’t have pension arrangements for employees where the employer contributes.
“Even those companies already providing a pension scheme will have to re-assess their existing arrangements. With the mandatory introduction of auto-enrolment the level of take-up for existing schemes is likely to increase resulting in higher cost. For companies planning to do the minimum, money will still be diverted into pensions and is likely to put a squeeze on profits.”
The changes to pension provision are coming into force as a result of employees not saving enough for pensions currently estimated at 7 million people across the UK. At the same time the number of pensioners in the UK is set to surge by 33 per cent by 2050 making the issue of pension provision increasingly important. It is expected once introduced the new measures will increase pension uptake by 80 per cent.
(BMcN/GK)
Robert Birmingham Managing Director of Xafinity Consulting who advises some of the UK’s leading businesses on pension provision made the call following a seminar attended by Northern Ireland business leaders. It follows radical changes which are due to come into force next year governing the way pensions will be provided by private sector employers. From October 2012 all employees earning over £7,475 in Northern Ireland will be automatically enrolled a pension scheme.
Mr Birmingham said that the implications of the new arrangements for pensions are far reaching and the most significant changes to take place since the introduction of state pensions back in 1909. He added: “The biggest changes will be faced by companies which currently do not have pension arrangements for employees where the employer contributes. A recent study by the Institute of Directors found that the 2012 deadline is likely to impact small businesses most with 43 per cent indicating that they don’t have pension arrangements for employees where the employer contributes.
“Even those companies already providing a pension scheme will have to re-assess their existing arrangements. With the mandatory introduction of auto-enrolment the level of take-up for existing schemes is likely to increase resulting in higher cost. For companies planning to do the minimum, money will still be diverted into pensions and is likely to put a squeeze on profits.”
The changes to pension provision are coming into force as a result of employees not saving enough for pensions currently estimated at 7 million people across the UK. At the same time the number of pensioners in the UK is set to surge by 33 per cent by 2050 making the issue of pension provision increasingly important. It is expected once introduced the new measures will increase pension uptake by 80 per cent.
(BMcN/GK)
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Northern Ireland WeatherToday:It will be cloudy again throughout the day. Mainly dry in the morning, but patchy drizzle in places, becoming more widespread and persistent in the afternoon. Freshening southwesterly winds. Maximum temperature 12 °C.Tonight:Cloudy with a spell of heavy rain pushing south through late evening and the early hours, followed by some clear spells. Minimum temperature 6 °C.
