Staff in small firms may miss out on pension help

Pension reforms must be made to work for smaller firms that cannot afford HR departments, the government has warned.

James Purnell, minister for pensions reform, said while HR and trade unions did a good job persuading employees in bigger organisations to sign up to occupational schemes, the government had to consider smaller firms that could not afford people with HR expertise.

Speaking at a pensions conference in London last week, Purnell said automatic enrolment to a National Pension Savings Scheme (NPSS) was vital for smaller firms.

“The workplace is very important [in signing people up] and so is the role of trade union representatives and HR management. But we cannot rely on them to provide advice for everybody,” he said.

“Pension reforms have to work if there are no HR managers or trade union representatives in place, but they also have to enable bosses at smaller companies to provide generic financial advice.”

Sue Rogan, chief executive of research organisation the Resolution Foundation, urged the government to detail how employees would receive generic advice.

“Without access to generic financial advice, the pension reforms will not be successful. Not everybody will need advice, but some will need it more than others,” she said.

“It is not just about whether to opt out of the NPSS. It is about understanding an employee’s wider finances and assessing whether contributions are affordable given other financial commitments, such as debt or Child Trust Fund contributions.”

Purnell said a delivery authority would be created to design the operational structure of the NPSS. More detailed proposals on the role and responsibilities of the authority will be set out in the white paper on personal accounts in December.


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