Companies struggling with pension shake-up

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changes to pensions legislation will be “a significant business challenge” this year, according to PwC survey of human resources, pension and finance professionals in businesses employing over 250,000 workers across the North.

Starting from October 2012, employers will automatically enrol workers into a workplace pension if they meet certain criteria. However, employees will be able to opt out. PwC recently held a number of workshops for the larger employers in the North, focusing on the challenges of preparing for pension auto-enrolment.

Eighty eight per cent of employers confirmed auto-enrolment was one of their top three business challenges during 2012 and, of those, 40 per cent said it was their greatest challenge.

John Harding, director in PwC’s Northern human resources practice, said: “Employers are concerned at how they will be able to properly classify their workers as well as how to ensure the right communications are issued to the right people at the right time.

“This will be especially challenging for employers with a high proportion of part-time employees. Given that wholesale and retail businesses represent one of the largest groups of employers in the North, this will impact local employers especially hard.”

A third of employers who responded said they are either ‘uncomfortable’ or ‘very uncomfortable’ in being able to meet their obligations. Mr Harding said: “I am not surprised at these findings, especially as the definitions that most employers use to calculate pension contributions currently may not meet the minimum requirements under pension auto-enrolment.”