HR must face up to the pensions challenge and tackle the raft of new
legislation to prepare for the UK’s aging workforce, experts warn.
Last week the Government published its Pensions Bill, which introduces many
provisions, including a Pension Protection Fund (PPF), which will guarantee
members specified minimum benefits of companies go out of business.
Charles Cotton, CIPD adviser on reward and employment conditions, warned
that HR must prepare for change.
"Every HR person has to go back to basics," he said. "[Many
at the moment] are scared off by the terminology, but pensions are too
important to leave with the finance department." He said pensions already
play a huge part in recruitment and retention, and will increase in importance
as the workforce ages. If left to the finance department, the cost will be
looked at in isolation, he said, without acknowledging the benefits to motivation
and staff retention.
Cotton said CIPD figures show that 60 per cent of its members are
responsible for pensions.
"HR has got to rise to the challenge," he added. "This is our
time to make our stamp."
The creation of the PPF has prompted fears that this will increase employer
costs.
Mark Duke, partner at management consultants Towers Perrin, said:
"Government policy is contradictory. Consumer confidence in the pension
system is low and one of its solutions is to impose new regulation and greater
cost on the employer."
EEF, the manufacturers’ organisation, believes employers must be able to
recover at least part of any additional costs. Its deputy director of
employment policy David Yeandle said: "As members are the ultimate
beneficiaries of these insurance arrangements, it is only reasonable that
employers should be able to share the cost of financing the PPF by recovering
at least part of the levy from members."
Full details of the Bill are available on online.
By Quentin Reade
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