Redbridge Council employees will not be automatically enrolled into pension scheme until 2017
14:03 14 February 2013
The borough will delay enrolling council employees into an automatic pension scheme for another four years, in a move that has been branded as showing “a lack of leadership”.
The decision to delay automatic enrolment into a workplace pension for council workers until October 2017 was made by cabinet at Redbridge Town Hall, High Road, Ilford on Tuesday.
The council was due to enrol existing eligible job holders on to the scheme by March 1, as part of national pension reforms.
Labour Cllr Wes Streeting said: “I have considered this scheme carefully and I think the council have shown a distinct lack of leadership in putting off automatic enrolment.
“The intention behind the Pensions Act 2008, was to reinforce the importance of pensions and paying into the plan by employees. I think the council have set a worrying precedence and have shown a lack of care for staff.”
It is difficult to predict how many employees would stay on the scheme if automatically enrolled, but if 10 per cent of the eligible 1,401 employees stayed on it, it would cost the council almost £600,000 a year.
Cllr Streeting added: “The cabinet appears to be ducking the decision and leaving the problem to others. I would like them to delay the matter until next year instead.”
Employees would be able to “opt out” of paying into the plan, but the council would then be required to enrol them again every three years.
Cllr Ian Bond said: “There is a big difference between us and the private sector; pensions are very expensive. I think the deferral of the decision will be mirrored by the majority across London.
“It’s always been the case that new employees joining Redbridge are automatically joined to the pension scheme, and then if they wish to opt out they have to leave. The people who might be affected by auto-enrolment are almost all people who will have actively decided to leave the scheme at some point in the past, and they can rejoin at any time.”
The auto enrolment would also require “significant additional work” for the human resources, including systems changes, making the payroll deductions and administering joiners and leavers to the scheme.
Cllr Keith Prince suggested that Cllr Streeting’s remarks showed “a lack of understanding” of the scheme and for the state of local council’s finances.
All concil employees, including teachers, would be affected.