Debi O’Donovan’s musings on the key events of 6-17 January 2013
This week has seen a raft of government announcements affecting benefits and pay, as well as guidance from the likes of the Financial Services Authority and Office of Fair Trading.There are more such tomes in the pipeline (oh joy!) affecting everything from pensions, share schemes and incentives to the long-term ill.
So where does a busy benefits person start?
The biggie was the one on the new flat-rate state pension. The devil will be in the detail and there will be plenty of headlines about the losers under this new deal. However, I believe that the flat-rate state pension is a good thing and it now makes sense for everyone who can save for a pension to do so.
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Read: New flat-rate state pension is announced (and we have handily linked to the full pdf of the report if you are really keen to see the full details).
Enjoy!
Debi O’Donovan, Editor, Employee Benefits
Twitter: @DebiODonovan
It would be helpful if the Government undertook joined up thinking on pay and benefits. They are moving to a Stalinist position; everyone lives on an amount they decide and if you earn more than a certain amount of money or have savings about a certain amount they punish you through the tax and benefit system.
Risk based benefits and pensions require long term certainty; not the constant shifting of goal posts. As benefit specialists do we provide vehicles for long-term care – or will that result in a reduction in state aid? Do we encourage young high flyers to contribute to their pensions’ when they end up with penal tax on their savings? Even at the design stage Government vacillation or political expediency means trying to have a coherent, business relevant strategy is difficult. Do we want a “safety net” above the level of state provision, do we want to enhance employee’s well-being; but risk a large tax bill, or do we give the employee lifestyle choices to fit their demographic, but knowing that younger employees have a short term perspective due to the amount of debt they carry and economic uncertainty?
As always we will do our best to optimise our benefit offering for our employer and employees; but doing so with one if not both hands tied behind our back due to the heaviest “light touch” government regulation, current and prospective, many
Ian makes such a valuable comment above. Providers, Actuaries, Administrators, Legal Firms, Insurers and all the other usual suspects will rush to pick apart and understand the “huge tomes” that Debi describes, and companies and their HR or pension depts. will sigh another huge sigh of frustration at more “change” with all the system and communication exercises that these entail, but Govts are in office for five years; these are lifetime choices and decisions. It’s about time we stopped using the Pensions and Welfare system as a political football, and came to some national consensus about what we believed people should be entitled to, and then worked out how to pay for it.
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