Hospitality employers are likely to be hardest hit by changes to pension legislation being introduced by the Government, experts have warned.
Under the new Pensions Bill, employers will have to contribute 3% of employees' wages into a personal account unless the individual opts out or is given access to an adequate workplace pension scheme.
The personal accounts system, coming into effect in 2012, will require employers to set up and pay into a retirement pot for every worker above the age of 22 who earns more than £5,000 per year.
But firms in the hospitality sector often employ a large number of casual workers, who currently don't have pension arrangements meaning costs could go up “significantly”, according to Tony Bacon, senior consultant at actuaries Lane Clark & Peacock.
“If you have a low take-up to your pension scheme, and your competitor has a high take-up then you will be losing a competitive edge,” he told Caterer sister title Personnel Today.
The majority of organisations have been surprised by how much the new law will cost them, according to Bacon.
“In the leisure industry, many people just work for three months at a time,” he said.
“There are huge administrative issues in setting up pensions, as well as the cost of paying in.”
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By Daniel Thomas
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