Those SME’s which have signed up to NEST, the government-backed pension scheme, have seen a strong take-up amongst their staff. From October 2012 auto-enrolment for large firms will become a legal requirement, but companies with 250 staff or less do not have to join up until 2014.
No one is certain how many employees will stay in the pension, some may opt out. This is especially so in smaller firms where company bosses are unsure of the changes. Estimations vary from 50% to 90%. However some of the reports from the SMEs already involved in the scheme are reporting an 80% take-up.
By a complete contrast VBH, a door and window company, started with the minimum 1% contribution, and 78% of their eligible employees have signed up. VBH, who has 68 employees, took the decision not to auto-enroll staff but to allow them to decide for themselves, after being given presentations on what was on offer at each of the four sites.
VBH’s HR manager, Jan Weaver, said that although the staging date was not until July 2014, they started to investigate the scheme and decided to sign up early. She believes that because they have kept the contributions affordable those enrolled will get into the habit of saving: contributions can be increased at a later date if it is deemed necessary.
About 15% of those joining the scheme have decided to put more in than the minimum; Jan Weaver went on to say. In the early days of the scheme when the decisions had to be made, Ms Weaver worked closely with the finance director; however she is now solely responsible for the administration. She advises that most Human Resource Officers should be able to handle the scheme, even if they have had little experience with pensions.