Auto-enrolment and waiting for the train that never comes

At this time of year it’s not much fun to start a Monday morning waiting on a cold wintry platform for a train that never comes. For those of us London commuters we know the feeling all too well.

At first the announcer assures us the train is on its way; the service is experiencing minor delays; the train will be at the station in approximately 10 minutes; there are leaves on the track; the track is frozen in parts; there has been a small signalling problem in the Lower Sidcup area.

However, there is that nagging feeling that the train will never arrive.

That is the danger now facing the introduction of auto-enrolment.

Originally all staff from small firms who were not already members of their company pension scheme were going to be auto-enrolled from April 2014. This date will now be shifted to May 2015 for staff of firms with fewer than 50 employees.

There is a sound argument for reducing the burden on small firms at this difficult economic time. However, the risk is in the message it sends to small business owners.

It is employees of small firms that are most in need of pension support from NEST and auto-enrolment. And employers need to start preparing now. But how do we think they will react to this latest delay? They will breathe a collective sigh of relief and push the item to the agenda for 2014. The thought will also cross their mind about whether this will ever actually happen.

If the Government is serious about auto-enrolment it should stick to the current timetable and send a clear message to all employers that they need to put a system in place as soon as possible.

Otherwise those financial advisers and employee benefit consultants seeking to work with employers will receive short shrift when they approach firms and offer to help them make the necessary transition.

Tony Cox, Linstock Communications