Yes, pensions are compensation

So of course this is going to happen:

Tim Jones, the chief executive of the National Employment Savings Trust (Nest), said that forcing companies to offer all members of staff a workplace scheme would result in the “redistribution” of workers’ wages towards the extra huge pensions bill.

He said: “There is no new money in the world. Businesses will absorb the extra costs and some of that will be in some people getting lower pay rises than they otherwise would have got.”

The employer has a pot of money which he thinks the job is worth. Makes no difference to him whether that pot goes into NI payments, a pension of current wages. The job is still worth the same amount.

So of course insisting upon a pension will mean lower than otherwise wages. How could it be otherwise?

6 thoughts on “Yes, pensions are compensation”

  1. It’s good to see someone in such a position publicly acknowledging that 2+2 can never actually add up to more than 4. Not so long ago the chairman of the Low Pay Commission admitted that raising the minimum wage could reduce the number of jobs. Wonders will never cease.

  2. It’s a half-arsed scheme. Far better to introduce something like the Aussie or Singapore one, where instead of even making a PR pretence it’s being paid by your employer, personal private pension contributions are deducted from your salary on the same basis as PAYE (but go into your own fund, obviously).

  3. “How could it be otherwise?”

    Well, clearly, that eeeeeevil capitalist bastard who owns the company could stop puffing on his huge cigar and pony up the money, of course.

  4. “insisting upon a pension will mean lower than otherwise wages”

    Unless you’re on the minimum wage, when it can’t go any lower. In that case you lose your job.

  5. The employer has a pot of money which he thinks the job is worth.

    Worth reminding ourselves that it’s not actually the employer who decides what the job is worth, it’s the consumer. All the employer (and employee) can do is decide a division of that value between themselves.

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