A major change to auto enrolment is being considered by the UK government. Since its inception, the scheme has been a runaway success, with millions of people being auto enrolled into workplace pension schemes, many of whom had never saved for their retirement before. However, despite the success of auto enrolment, there have always been some concerns raised about the status of seasonal workers and whether they should be included in the auto enrolment process.
As it stands, employers are currently required to enrol eligible workers into a workplace pension scheme and make contributions to it. This includes many seasonal workers. Both the CBI (Confederation of British Industry) and the NFU (National Farmers Union) have long been critics of this situation as auto enrolment is a huge burden on farmers who rely on using a lot of seasonal labour.
Lee Osborne, skills and employment adviser at the NFU argues that farmers face increased costs and time having to auto enrol seasonal workers for a very short time:
"Our main concern is that the auto-enrolment of seasonal workers is an unnecessary burden to farm businesses with little or no benefit to the worker, who is unlikely to ever draw on the resulting very small pension pot. Large numbers of seasonal workers are required to hand-harvest, grade and pack crops and they will stay with the business for a finite period before returning home after their employment ends. There should be no pension auto-enrolment requirement for seasonal workers."
Rachel Smith, principal policy advisor at the CBI also commented:
"Where staff, like seasonal workers, are due to leave the business soon after they have started, a waiting periodis needed. This is why the CBI sought the waiting period of three months we now have. The review should consider whether this is sufficient."
When contacted by the Financial Times to comment a spokesperson for the Department for Work and Pensions confirmed that the situation will be reviewed and the concerns of the CBI and NFU will be taken into account.
"Our review will look at how we can build on the success of automatic enrolment and ensure it continues to work for individual savers and employers. We look forward to hearing from employers from all sectors, including those who employ seasonal workers, and will consider their views."
However, the review is not without its critics. Steve Webb, the former pensions minister sees it as a 'backward step.' "There is already enough concern that AE excludes millions of people on the basis of low earnings or age, and I think it would be a mistake to make it less comprehensive still."
Whilst no definite timescale has been placed on the auto enrolment review, it is thought it will be completed sometime in 2017.
To learn more about the statutory auto enrolment review 2017 and what it will cover, click here.