Good pensions news for gig workers

The Pensions Regulator (TPR) chief executive, Charles Counsell, has urged companies in the gig economy to proactively begin work on enrolling their employees into pension schemes, rather than dealing with the issue on a “case by case basis”.

 

 

The comments, made as part of TPR’s podcast series, follow the High Court’s recent ruling that declared that Uber’s employees were classed as workers and are entitled to employment rights, including being enrolled in a pension scheme. Commentators believe the comments should be a wake-up call to gig economy companies that they need to carry out a careful assessment of their workforce to ensure they comply with their auto-enrolment obligations.

 

Under the relevant legislation, the term ‘worker’ is very widely defined and may well encompass many individuals who work for these companies. Depending on their ages and earnings, these workers are entitled to be provided with pension benefits by these companies. It will be short sighted for a company to bury its head in the sand as this will just be storing up problems for the future.

 

Apart from potential litigation from disgruntled workers, it may also find that future investors (be it during a funding round or an IPO) may look at this compliance issue carefully as, apart from reputational concerns, the potential costs to the company could be substantial.

 

Industry experts have also backed the call for action, with Now Pensions chair of trustees, Joanne Segars, adding: “We support this call as our research shows that the self-employed and multiple job holders are vastly under-pensioned and reach retirement with private pension wealth just 15% of the UK average.” Now Pensions is lobbying the government to remove the £10,000 auto-enrolment trigger and to help more people access private pension saving.

 

DISCLAIMER: This article is for general information and is not intended to address your particular requirements. No individual or company should act upon such information without receiving appropriate professional advice.