New government legislation, which would make it compulsory for employers to contribute to their employee's pension schemes, has been criticised by industry bodies and printers alike.
The bill, confirmed in Tuesday's Queen's speech (6 November), outlines new legislation that forces companies to make a minimum contribution of 3% into new pension "personal accounts".
The scheme, which the government said would "help people meet their retirement aspirations", requires a 4% input from the employee in addition to a further 1% from the government.
The legislation has been welcomed by the Confederation of British Industry and trade union Unite, which called it a positive change that would provide "good quality safe pension schemes properly funded by employers".
But the print industry has been less welcoming to the bill, condemning it for being both impractical and "forced".
BPIF solicitor head of legal Anne Copley told printweek.com: "Given that the people the government most wants to protect is the lowest paid, it seems nonsense to allow an opt-out.
"A part-time bindery employee having to pay 4% of their wages is more likely to choose not to take up the scheme than higher-paid employees."
Copley added that if "employees don't have to join if they already have a 'good workplace scheme', who will decide if the scheme is 'good'?"
This view has been echoed by employers that are already paying into independently run schemes.
Roger Severn, managing director of London-based printer Aquatint, told printweek.com: "The scheme is an admirable idea, but the execution is totally impractical if it's imposed on you.
"We operate our own scheme, into which we contribute 4.5%. Our employees can opt into it a year after they join the company."
Severn outlined major drawbacks faced by printers over the new personal accounts.
"There have been times that we've had to opt out of pensions in our 28-year history and our staff have understood that.
"If we didn't put the pensions on hold, we would've had to let some staff go."
He said that an employer would likely factor in the cost of pension contributions to the salaries it offers to staff, potentially resulting in lower wages.
"I have no problems rewarding good staff, but I resent the government telling me to do so," Severn added.
The enforced nature of the bill has proved unpopular with many employers.
Gurdev Singh, managing director of Nottingham-based printer Howitt, told printweek.com that "the devil is in the detail".
He said: "We are comfortable to pay into company-approved pension schemes, but authoritarian instruction from the government to do so is inherently a bad thing."
"On the surface, it's a good idea as everyone should be saving for their retirement. But as government pensions have been so devalued over recent years, people don't really believe in them."
Singh added: "Politicians are coming up with these soundbites and then leaving businesses to pick up the cost at the other end," he said.
The new bill has also come under attack for creating more confusion for those unsure of how best to save for the future.
BPIF's Copley said: "Employees that are already apathetic about making provision for their old age will now be further confused by yet another option."
TPF Group chief executive Steve Brundle added: "It's potentially a piece of significant legislation. As for the wider way to solve the pension problem though, it seems like a case of too little, too late."
The bill, confirmed in Tuesday's Queen's speech (6 November), outlines new legislation that forces companies to make a minimum contribution of 3% into new pension "personal accounts".
The scheme, which the government said would "help people meet their retirement aspirations", requires a 4% input from the employee in addition to a further 1% from the government.
The legislation has been welcomed by the Confederation of British Industry and trade union Unite, which called it a positive change that would provide "good quality safe pension schemes properly funded by employers".
But the print industry has been less welcoming to the bill, condemning it for being both impractical and "forced".
BPIF solicitor head of legal Anne Copley told printweek.com: "Given that the people the government most wants to protect is the lowest paid, it seems nonsense to allow an opt-out.
"A part-time bindery employee having to pay 4% of their wages is more likely to choose not to take up the scheme than higher-paid employees."
Copley added that if "employees don't have to join if they already have a 'good workplace scheme', who will decide if the scheme is 'good'?"
This view has been echoed by employers that are already paying into independently run schemes.
Roger Severn, managing director of London-based printer Aquatint, told printweek.com: "The scheme is an admirable idea, but the execution is totally impractical if it's imposed on you.
"We operate our own scheme, into which we contribute 4.5%. Our employees can opt into it a year after they join the company."
Severn outlined major drawbacks faced by printers over the new personal accounts.
"There have been times that we've had to opt out of pensions in our 28-year history and our staff have understood that.
"If we didn't put the pensions on hold, we would've had to let some staff go."
He said that an employer would likely factor in the cost of pension contributions to the salaries it offers to staff, potentially resulting in lower wages.
"I have no problems rewarding good staff, but I resent the government telling me to do so," Severn added.
The enforced nature of the bill has proved unpopular with many employers.
Gurdev Singh, managing director of Nottingham-based printer Howitt, told printweek.com that "the devil is in the detail".
He said: "We are comfortable to pay into company-approved pension schemes, but authoritarian instruction from the government to do so is inherently a bad thing."
"On the surface, it's a good idea as everyone should be saving for their retirement. But as government pensions have been so devalued over recent years, people don't really believe in them."
Singh added: "Politicians are coming up with these soundbites and then leaving businesses to pick up the cost at the other end," he said.
The new bill has also come under attack for creating more confusion for those unsure of how best to save for the future.
BPIF's Copley said: "Employees that are already apathetic about making provision for their old age will now be further confused by yet another option."
TPF Group chief executive Steve Brundle added: "It's potentially a piece of significant legislation. As for the wider way to solve the pension problem though, it seems like a case of too little, too late."
Source: packagingnews
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