Automatic enrolment - is it really working?

 

Despite all the handclapping and back slapping at TPR and DWP, amid the apparent success of high compliance rates, I’m not sure that automatic enrolment will be the success that it might have been.

 

From what I can see, from the front line, too many small employer’s do not engage. They exercise no due diligence over choosing a pension scheme, how it’s designed or the different processes they could use to meet their duties and explain them to their staff.

 

Do staff really value what their employer considers to be a burden?

 

What will happen when contributions rise?

 

The benefits agenda is now, it seems, controlled by the the Treasury. They seem to believe that the people to influence are  individual tax payers. Whether they do it by encouraging the market to appeal to our individual ego’s or by mass education to appeal to our rational selves, they are completely blind to the potential of our being influenced more easily by our peers.

 

In taking this view, they ignore the evidence of their own specialist advisers.

 

Lord Turner, Chair of the pension commission that gave birth to auto enrolment observed that there was a “decreasing belief among many employers that there are self-interested reasons to provide good pensions to achieve recruitment and retention objectives”. Wasn’t auto enrolment supposed to be a nudge, toward changing that?

 

He also noted “the limited impact of providing better information and generic advice”

 

From what I hear though, that is the master plan. Better information and generic advice. Route 1.. They’ve even launched a competitor to auto enrolment before its implementation is finished. Bizarre. I hope that women named Lisa won’t be offended.

 

Yes, we are individuals. Individual endeavour and choice are important. But, we are also members of society. We are all thereby interconnected, achieving much more together than we could on our own. We’re all pretty busy. We don’t all have time to be experts in everything so the judgements our peers make are important to us.

 

If that was the focus, instead of short term greed and political expediency, auto enrolment could be the start of something big.

 

Or, to put it another way:

 

If only…

  • All employers were good employers and cared about their staff
  • All working people could look beyond tomorrow and see that the light at the end of their working life tunnel, is a train
  • All the business advisers out there would talk about this instead of peddling fear for short term gain

Then…

  • Employers would take pensions seriously and do the job properly
  • Employees would follow their lead and value the arrangements that are being made for them
  • We would make real progress in protecting whole generations of working people from the ignominy of financial distress inn their golden years.

Maybe I’m being as idealistic as the treasury in my own way. Hey ho. What do you think? 

 

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