Nuttall and Shepherd's pilot pension scheme proves successful

An industry pilot scheme, aimed at auto-enrolling new directly employed staff into stakeholder pensions at Edmund Nuttall and Shepherd, has resulted in a 75% increase in the number of workers making personal contributions compared to the national average in construction.

Results of the pilot, which was launched three years ago, show a positive trend towards workers thinking about their retirement plans.

Although the figures are encouraging, B&CE said that the legal requirement on the pilot for workers to fill in paperwork, to state how much they wanted to contribute, had hampered greater success.

"The problem with the paperwork is that for workers it was just as easy for them to choose a weekly contribution of £0 as it is to choose £10," said B&CE deputy chief executive John Jory.

"What we need is for employer-led stakeholder pension schemes, such as EasyBuild, to be able to take the route of the new legislation on Personal Accounts, which comes into effect in 2012, and will see staff automatically enrolled without the need for paperwork. If staff do nothing, or say nothing, they will be signed up."

Jory added: "At the moment this move is being hampered, probably unintentionally, by the Distant Marketing Directive from the EU. This looks to tackle issues such as customers automatically being signed up to extended warranties without knowing. We will continue to lobby government on this issue to ensure that personal pensions such as EasyBuild, can compete with Personal Accounts on a level playing field."

Although the pilot was open only to new directly-employed workers Jory said that many existing staff, many of whom might be relying on a state pension, were starting to see the benefit of a stakeholder scheme.

Jory also told CJ that although the pilot was still ongoing, other firms, which could not be disclosed, have introduced different joining methods such as inserting information in wage packets and mailing information out to staff in an effort to encourage more of their workforce to take advantage of the industry-wide pension contribution matching arrangements.