AE inquiry launched by work & pensions committee
The Work and Pensions Committee has launched an auto-enrolment inquiry, calling for input on the effectiveness of its implementation, especially on small and micro employers, Heidi Allen MP has announced.
“It is vital we communicate to and support these smaller employers so they can meet the new requirements. I hope this inquiry will help us to review the effectiveness of the current process and make recommendations for improvement,” the Conservative MP for South Cambridgeshire said.
The committee is especially keen to hear from SME employers and their employees, to look the effect on their business and the ways they were mitigating any problems they had incurred.
Other key areas the inquiry would look at included the effectiveness of the process, and lessons learned, as well as views on the SME support from the DWP and recommendations they might have for improvement.
| The committee is keen to receive submissions in the following areas: |
• The effectiveness of the automatic enrolment process and lessons learnt so far • The impact of AE on smaller employers and how they plan to mitigate any negative effects • DWP support for small and micro employers in meeting their AE obligations, and any recommendations for improvement • The suitability of the AE earnings threshold and minimum contribution rates • The effect of the delays to the implementation of increases to minimum contributions announced in the Autumn Statement • The interaction between AE and other pensions reforms, including the new state pension and pension freedom |
Committee chair Frank Field MP said: “Time has now come for smaller employers, including people who would not consider themselves business people – such as those who employ nannies and carers – to participate.
Andy Beswick, Aviva’s managing director of Bbusiness Ssolutions, said: “Planning is key here. SMEs of all sizes should be looking now to find out when their staging date is so they can begin to prepare. There is plenty of information and support available as well, start doing your research now and the process will be much easier in the future.”
The deadline for receipt of submissions is 3 February 2016.
Adviser View
Nathan Long, head of corporate pension research at Bristol-based Hargreaves Lansdown, said: “SME employers undoubtedly hold the key to the successful roll out of AE. No longer are well-resourced HR teams in charge of implementation, it is now small business owners who must get to grips with the details of the legislation.
“If the admin burden is reduced for these small businesses on the back of the inquiry, it will have been a great success. It is interesting the committee will also examine the interaction between AE and other pension reforms.
“Pension freedom in particular requires people to make confident, considered decisions at the point of retirement. This is in stark contrast to the inertia relied upon to make it a success.”
