AXA has spoken out about the problems the Government will have enforcing the National Pension Savings Scheme with employers.
According to the Government, it currently has sixteen enforcement teams that look into the National Minimum Wage to make sure it is being paid to staff. AXA believes that this is nothing compared to what they will face over the implementation of the National Pension Savings Scheme.
Our view
The Government confirmed that only one in seventy thousand employers have been prosecuted for not having Stakeholder pension scheme in place for employees. The National Pension Savings Scheme will be far more involved and far reaching and the Government cannot possibly hope to police it effectively.
It is very possible that smaller employers watching their costs will try to avoid putting in the pension scheme and will actively discourage joiners.
From our view as employers, we are just another agent for the Government, doing their job for them. Add this to collection and payment of tax, national insurance, value added tax, statutory sick and maternity pay, plus the rest and it is easy to see why employers are not happy about this new pension.
Mike Morrison from Winterthur Life made a very valid point when he said: “The Government will never be able to police the stuff that goes on behind the scenes at firms. They should be looking at what incentives it can provide to encourage people to stay in the scheme”.