Journalists are being urged by the NUJ to consider joining their company pension schemes featuring employer contributions before new ‘auto-enrolment’ regulations are introduced next month.
Under the new rules employees will be automatically enrolled into workplace pensions. Individuals would have to ‘opt out’ rather than ‘opt in’ as they used to do. But if they opt out they don’t get pensions from their employers when they retire.
Trade unions have always pointed out that pensions are deferred wages, earned by employees throughout their working lives.
Those not in company pension schemes don’t benefit from employer contributions to schemes, which can be as much as 7 per cent of salary under existing ‘pre-auto enrolment’ systems.
NUJ deputy general secretary Barry Fitzpatrick says the new law does offer the union an opportunity to develop and enhance benefits for all workers. But he warned that it could also mean lower payouts in retirement for those new to a company scheme.
Employers will have to pay more into pension pots because of a likely higher uptake. So they may be tempted to lower their contributions to the initial legal minimum of one per cent of a new joiners’ pay, which would result in worse pensions.
He added: “Our members often think pensions are unaffordable and untrustworthy. Employers save millions of pounds because of that attitude. It’s money that should be going to our members. It can’t be said too often: pensions are deferred wages.
“The new law gives us a unique opportunity to make sure our members get decent pensions – and attract non-members. But we also urge people to consider joining existing schemes before employers are tempted to undermine them, even though we will resist such moves.”
The union is calling on members to come forward as pensions reps. One of their roles will be to be vigilant over ‘administration fees’ which can literally halve ‘deferred wages’. A full briefing on auto-enrolment is available here.