mployers in the United Kingdom that don’t offer a pension plan might have to start teaching employees how to save money for retirement.
In a white paper entitled
Simplicity, security and choice: Informed choices for working and saving,
the Department of Work and Pensions said that through the Pensions Bill it will compel firms without their own pension scheme to provide staff with a “decent standard of information.”
But the paper offers little clues about how firms can go about doing that and it could be difficult, according to Deborah Cooper of Mercer Human Resources Consulting. She said there are some difficult compliance issues and the paper doesn’t really address the needs of a diverse workforce.
“One lead in the report is that the government sees large pension providers as the answer, in the same way that employers currently have to work to provide stakeholders,” Cooper told HR Gateway. “However, this will not be independent advice and so it must be questioned.”
She said it might be just as beneficial in this situation for the employer to pay for independent financial advice about pensions for an employee as it would be to pay into a stakeholder scheme.
“Which is best? I don’t have an answer,” said Cooper.