The Pensions Bill, which will introduce auto-enrolment and bring forward a rise in state pension age, has been described as “good news for businesses” by the Confederation of British Industry (CBI).
Employers will be required to automatically enrol workers into pension schemes from 2012 and the state pension age will rise to 66 for both men and women by 2020, as part of plans to help workers save for their retirement.
Minister for pensions Steve Webb said: “This Bill will radically transform the pensions landscape in this country. Millions of people, who currently have little or nothing put by for their retirement will, from 2012, find themselves enrolled in a workplace pension – setting them on the road to a more secure future.”
The CBI has welcomed the Bill, and many proposals made by the business group to cut the administrative burden on companies will be implemented.
Neil Carberry, CBI head of employment and pensions policy, explained: “Plans to allow firms to automatically enrol people after three months of employment are particularly welcome. This means employers won’t have to enrol short-term workers, who will usually opt out anyway.
“Proposals to introduce a simple way for existing schemes to show they meet the new standards will make the reforms easier for businesses to manage. This makes it more likely they will maintain their existing pensions, which are usually more generous than the new standard.”
However, construction union UCATT is calling on the Government to rethink policies on increasing the state pension age, following research from Oxford University’s Institute of Ageing, which recommended the introduction of a flexible retirement age due to huge differences in life expectancy depending on income, lifestyle and location.
Alan Ritchie, general secretary of UCATT, said: “The ‘one-size-fits-all’ policy on retirement age is patently unfair to workers in physically demanding manual jobs such as construction. Already most construction workers are forced to retire early due to injury or ill health. By increasing the retirement age, construction workers are being made to work until they drop or forced into poverty when they are too sick to continue to work.
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“The introduction of a flexible retirement age would help to ensure that all workers and not just the wealthy can enjoy a healthy, well deserved retirement.”
For more information read the XpertHR reference manual on pension legislation.
