We bring you the latest HR reaction to the recommendations of Lord Turner on pensions out this week in The week in HR together with news on how much to expect in your new year pay package.

W/C 28/11/05
Reaction to the Turner Report:
What the report said:
For the Turner report at a glance see: The Guardian

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CIPD support abolition of mandatory retirement age:
An abolition of the mandatory retirement age, as recommended by Lord Turner, would remove the ‘ejector seat’ option from employers, and encourage better management of older workers, according to professional body the Chartered Institute of Personnel and Development (CIPD).

Duncan Brown, Assistant Director General of the CIPD said: “Raising the state pension age may well increase the notional supply of older workers, but it won’t necessarily increase the actual supply of them, or demand for them.

“One quarter of men and one third of women aged between 50 and the current state pension age are already not in the labour market. These people illustrate the real pensions and retirement challenge. If we want people to work longer, then we are going to have to find ways of ensuring that employment is attractive to older workers, and that they have the skills to make a contribution to the workforce.”

Brown criticized employers for being ‘lazy’ in their attitudes to older workers and commented that keeping people working longer is one thing but keeping them working productively was quite another.

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Employers Forum on Age (EFA) lift spirits:
The EFA raised spirits in response to recommendations by Adair Turner to raise the pension age from 65 to 67 by 2020 when they said that it doesn’t have to be all doom and gloom.

Sam Mercer, director of the EFA commented: “As Turner’s proposals are published today we all need to take a step back. There is no getting away from the fact that we have an ageing population and there has been much scare mongering about the idea of an extended working life. Demographics and economics dictate that we will all have to work for longer and so an increase in the retirement age is inevitable.

“What we need to remember is that the proposals will not come into force until 2020 by which time the workplace will be very different. Flexible working practices, career breaks, part time working and job sharing are all becoming more common and ‘acceptable’. Smart employers will be those that, with an eye on the future, offer their employees choice and flexibility.”

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Croner warns of ‘lose-lose’ situation:
Croner has dubbed the recommendation by Adair Turner to implement compulsory employer pension contributions as a ‘lose-lose’ situation.

According to the organisation, private businesses will be forced to make job cuts and lower wage settlements to foot the bill for the 3% compulsory contribution.

Richard Smith, employment services director at Croner said: “If the private sector retirement age is raised to 67, compared to 60 in the public sector, this is potentially very damaging for SME employers. Not only in terms of cost, it will also make it increasingly difficult to attract the best staff, who are likely to consider it a no-brainer that the public sector will offer a more comfortable work/life balance and greater job security.”

Commenting on the day-to-day impact of administering the proposed pension schemes, he says: “While larger organisations with established schemes may well be content with the idea of compulsion, smaller employers may have more issues around the time, cost and expertise to administer such schemes. We must also consider employers who may have only one or two employees – they would be ill-placed to run a scheme of any sort.”

Smith warned that job cuts and lower wages may be the result of compulsion.

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CBI greets report with caution
Welcoming the Turner report overall, the CBI heeded some caution saying that compulsion would be the sting in the tail that threatens small firms’ support for pensions reform.

CBI Director-General, Sir Digby Jones said, “The Turner report offers the most serious proposals for pensions reform yet. This reform could form the basis of a ‘new deal’ on pensions but that deal cannot come at the expense of jobs and competitiveness among Britain’s small firms.

Sir Digby Jones explained that the issue was not one that would be felt by larger employers, many of whom already contribute significantly to their employees pensions.

“It is absolutely right for workers to be able to choose whether they can afford to pay for a pension. But companies must get a choice too. Under today’s plans the only opt-out available to some struggling smaller firms may be to shut up shop.”

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Watson Wyatt applaud Turner
Alan Pickering of Watson Wyatt, author of the 2002 pension simplification report for the Government and Stephen Yeo former pension’s policy adviser to the Conservative party have welcomed the Turner recommendations.

Calling for an open debate on the issues raised by the report, Pickering said: “We welcome the Pensions Commission’s recognition of the importance of extending working lives as a key part of providing better pensions. The proposed increase to State Pension Age may catch the headlines, but other policy changes covering age discrimination, incentives for later retirement, occupational health and training are equally important.

“Adair Turner shows the way to a simpler state pension which will enable those employers who wish, to offer an occupational pension with greater freedom than currently exists. The challenge for Government is to respond positively and soon. The time for putting off decisions is past.”

Stephen Yeo commented: “Employers will welcome the Pensions Commission’s commitment to reverse the spread of means-testing which was spreading uncertainty about the wisdom of pension saving further and further up the income scale. Employers and pension providers do need to be confident that it pays to save in a pension.

“Adair Turner knows the importance of company pension provision, and its low cost. He does his best in his proposals to stop this becoming more onerous, but it is disappointing that there are no direct proposals to support those companies that do provide good schemes. The best they can take from this report is that other companies will be forced to contribute three per cent of pay to a Britsaver.”

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Peninsula lament the cost to business
According to research by Peninsula employment law firm businesses will carry the cost of the pensions reforms.

In a survey of almost 2,000 employers:

• 86% believe they will be forced to employ an employee no longer up to the job




• 83% believe the proposed pensions changes will result in more employment tribunals and legal wrangles




• 82% will suffer under new retirement age proposals




• 79% fear the consequences of new retirement age

Mike Huss, senior employment law specialist at Peninsula said the changes proposed by the Government would bring ‘uncertainty into a world of certainity’:

“Currently you can retire at 65 and claim your state pension, however, the proposals to raise the age to 67 will make it illegal to make someone retire at the current age of 65, with an individual being able to work beyond retirement age if he/she wishes to do so, leaving the employer having to consider the request carefully and most likely to deploy flexible working hours.

“The raising of the age to retire is a contentious issue and increasingly the individuals ability to do their job will be put under scrutiny, as, they may be incapable to do the job to the standard they once did. Employers will have to take action, especially, small firms who cannot afford to simply carry employee’s who are no longer up to the job and the dismissal of long serving and loyal servants will increase on the basis of it being a capability issue.”

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TUC remain opposed to raising pension age
Responding to the ‘bold and hard headed’ Turner report, Brendan Barber, General Secretary of the Trades Union Congress (TUC) said:

“We remain opposed to any proposal to increase the state pension age that would make manual workers and the poor worse off. They should not have to pay for a new pensions settlement.

“But the clear majority of the conclusions are undoubtedly progressive, and meet the tests we set in advance.

“Linking the basic state pension to earnings and introducing compulsory employer contributions are both extremely welcome. The report clearly offers women a better pensions deal.”

Barber concluded by saying that there were no ‘pain free’ solutions to pensions and urged employers, employees and the state to all play their part in the reform process.

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Other news:
Pay deals slip back into the doldrums
Pay rewards have eased back to their familiar 3% rate. According to number crunchers, IRS the marginal upward trend has been short-lived.

The median basic pay award stands at 3% in the three months to October 2005. This is unchanged from the revised figure for the quarter to September this year.

IRS Pay and Benefits editor, Sheila Attwood said: “As we move into the last month of the year, pay bargaining activity can be divided into two groups. Although a few employers settle pay awards in November and December each year, many more will be in the throws of negotiating pay rises due to take effect in January 2006. Just 3% of all pay deals are concluded in November and December each year, but a quarter are effective each January, making the final two months of the year a busy time for those preparing ahead.

“Our figures provide a now-familiar picture of the benign state of UK pay bargaining. In the three months to the end of October 2005, the median – midpoint in the range – basic pay award across the economy stood at 3%. All eyes are now on the busy new year bargaining round to see how employers react to slowing headline inflation.”

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Staff held back by poor management
British businesses are being held back by managers who fail to get the best out of their staff, according to the latest Workers’ Index published by MORI and The Work Foundation.

Almost one in four employees (24%) say that they are not inspired by their bosses and just over a quarter (27%) say that senior managers fail to provide them with a clear vision.

The situation has deteriorated since the first Workers’ Index in February this year. At that time two-thirds (66%) of employees said that their managers had a clear vision for the organisation whereas now fewer that three in five (57%) feel this way.

Of those critical of their employer, 60% identify improving the quality of management as the top priority for the organisation, while it is mentioned by just 18% of those who would speak highly of their employer.

For more on this story see: TrainingZONE

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Award recognises excellence in adult learning
The National Institute of Adult Continuing Education (NIACE) is looking for organisations that can demonstrate originality, creativity and excellence in encouraging adults to learn.

The Opening Doors to Adult Learners Awards, which take place in May 2006, are open to organisations across the UK that provide clear routes of progression for, and have a positive impact on, their learners. Each winning organisation will receive a certificate and £1,500.

For more on this story see: TrainingZONE

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Millions guided to next step to learning
The Learning and Skills Council (LSC) has advised over four million adults on their next step into learning.

The nextstep service, set up in August 2004, offers people over the age of 20, information on the options and financial assistance for training and learning available in their area.

David Way, Director of Skills at the LSC said: “It’s a really exciting time for adults looking to improve their lot in terms of literacy and skills. nextstep is providing a popular and valued service in the community and we would encourage more people to use its facilities to find out more about the learning opportunities and financial help available to them.”

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Free Health and Safety bench-marking tool
A new online tool aims to help businesses improve their health and safety performance.

The free health and safety performance indicator, available at Business Link has been developed with the Health and Safety Executive (HSE), Department of Work and Pensions (DWP) and the Association of British Insurers (ABI), to provide users with a benchmark against other businesses across sectors and sizes.

The move follows research that found that businesses consider time to be the key barrier to implementing a full health and safety policy.

Seventy two per cent of the 275 businesses surveyed by businesslink.gov.uk cited time as the key obstacle to improving health and safety processes followed by cost (50%) and a lack of staff awareness (35%).

The survey also found that staff welfare is overwhelmingly the main driver to businesses improving their health and safety procedures, (70%), followed by potential cost savings made through reduced insurance premiums (56%) and increased productivity (48%).

For more on this story see: TrainingZONE

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New online directory of occupational standards
A new online directory aims to be a one-stop shop for trainers and employers looking up UK National Occupational Standards.

The directory, from Skills for Business, contains information on occupational standards produced by the network of Sector Skills Councils and other standards setting bodies.

Users can search the directory by keyword, by the SSC/standards setting body responsible for the standards, by the appropriate sector or industry, or by the name of the suite of standards.

Stephen Studd, chief executive of SkillsActive, the Sector Skills Council for the active leisure and learning industry, said it was important for employers and training providers to access all National Occupational Standards as easily as possible.

For more on this story see: TrainingZONE