It is now more than 18 months since Pensions Auto Enrolment was introduced in the UK. Since then it has become a major focus for employers and, due to the staged rollout of the legislation, it is likely to be a number of years before it moves down the agenda.
Whilst auto enrolment is great news for employees, it is distracting employers from looking at the bigger picture of providing a structured benefit arrangement that can help attract and retain a skilled workforce. Although the jobs market is recovering, the hangover from the recession is still being felt – people are cautious about changing jobs and are now acutely aware of employee benefits such as income protection.
The recent focus on pensions is by no means a bad thing; but employers need to ensure they are looking further afield to offer their employees the best possible benefit arrangement. For example, it is not uncommon for auto enrolment to be the first time a 35-year-old starts contributing to a pension, they may think that the estimated State Pension Age is a long way off – after all they have 33 years to save for a long and happy retirement – but what would happen if the unthinkable occurred and illness or accident struck meaning they could never work again? How far will that pension go? Well, if they’ve only just started contributing the answer is not far at all, and with the continuing squeeze on state benefits they are facing serious financial difficulties – that’s not a position any business wants to put their employees in.
This is why PCH advise looking at Group Income Protection (GIP) as a solution. GIP is designed to allow companies to offer a much valued employee benefit which provides financial security to the employees who find themselves unable to work due to illness or injury and it also benefits the employer by replacing the unknown costs of absence with a fixed annual premium. It can cover a proportion of salary as well as associated employer expenses such as pension and national insurance contributions.
Not only are there financial advantages for both parties, you may be surprised at the positive influence such employee benefits can have over your recruitment and retention rates too.