Leisure and retail employers are likely to be hardest hit by changes brought in by the Pensions Bill, a leading expert warned last week.
Firms in these sectors often employ a large number of causal workers, who currently don’t have pension arrangements. But the personal accounts system, coming into effect in 2012, will require employers to set up and pay into a retirement pot for every worker above the age of 22 who earns more than £5,000 per year.
Tony Bacon, senior consultant at actuaries Lane Clark & Peacock, told Personnel Today: “Many of our clients are finding their costs will go up significantly. If you have a low take-up to your pension scheme, and your competitor has a high take-up then you will be losing a competitive edge.”
The majority of organisations are surprised by how much the new law will cost them, according to Bacon. “Many big retailers have staff that have been their employment 10 years but only work part-time and don’t have a pension. In the leisure industry, many people just work for three months at a time.
“There are huge administrative issues in setting up pensions, as well as the cost of paying in.”
Under the Pensions Bill, expected to become law this summer, employers will have to contribute 3% of employees’ wages into a personal account unless the individual opts out or is given access to an adequate workplace pension scheme.
