Decisions of a Director…

There I was wondering what to Blog about this week, when the post delivered a letter from The Pension Regulator informing us that our Staging Date for Auto-enrolment is 1st Sept 2017. Even for a company such as ours working in financial services, we still have to make sure we meet our obligations and of course communicate the benefits to our employees. But what should we do?

While younger employees might prefer the extra cash, the older ones probably appreciate the pension contributions more. This got me thinking about the responsibilities of employers to do the right thing which may not be popular among employees in the short term. Will the employers ever get the appreciation from the employees to justify the additional costs of providing a ‘good’ pension?  Or should the warm feeling that comes with knowing that you have done the right thing be sufficient?  Alternatively we could do the bare minimum and put the savings towards the next employee celebration.

Whatever we decide to do, I can be certain that we will be communicating the benefits to our employees.  I want to make sure that they understand the benefits of the company pension, their options and I will also take the trouble to explain why the company came to its decision.

A benefits communication platform like BORIS can’t make the decisions for you, but for £1 per employee per month it will help you to make sure your employees are kept informed and know the value of all the benefits you provide!

2014 Budget, not all good news!

Whilst the vast majority of the pension changes that were announced in the budget were extremely welcome, within the detail there is a proposal to link the normal minimum personal pension retirement age to the state retirement age.
 
What this means currently is that people retiring after 2028 may not be able to take their personal pension until age 57 instead of the current age of 55.
 
You might say: "Not a big deal, I don't think I will be able to retire until 65 anyway!".  However if the minimum age you can take your personal pension is set at 10 years below the state pension age then we may have a problem further down the line.
 
The timeline to move the state retirement age to 68 is already set and most commentators believe the move to age 70 will be announced in the near future.  I also believe that unless the Government can find money to fund state pension payments from somewhere else then the state pension age could easily be moved to age 80 (albeit likely only to affect the younger generations).  If this happened these proposals could see younger generations lose access to their personal pensions until age 70!
 
Although detail on the minimum pension age proposals have not been announced I would reiterate the general philosophy of diversification in relation to retirement planning.  With the very positive changes to the ISA regime including the higher £15,000 subscription limit and the removal of the distinction between cash and investment ISA subscriptions, Individual Savings Accounts have become an ideal supplement to pensions for meeting the majority of people's retirement goals.