Leniency needed on pension ruling

What does the jobseeker look for when weighing up one employer against another? A good salary? Promotional prospects? A pleasant environment in which to work? Undoubtedly all of these and perhaps one more thing: access to a pension scheme. This may not seem so attractive to younger employees. But to an increasingly ageing workforce at a time when people are living longer and need more money in retirement, a pension is probably the second biggest investment after a mortgage.

Pensions are beneficial for employers too. In a competitive job market, where the hunt for skilled staff can pose a huge headache, a company that offers a pension scheme is likely to distance itself from its competitors and may well experience lower staff turnover.

Good news all round? Not quite. For the hospitality industry, the new legislation, which makes it obligatory from October for all companies with more than five employees to set up a stakeholder pension scheme, is likely to evoke mixed reactions.

The spirit of providing stakeholder pensions is a good one. They offer those on low incomes the opportunity to save in a low-cost and tax-efficient manner (although it remains to be seen whether those earning £10,000 a year will feel they can afford to contribute to the scheme). But the way in which the scheme has been imposed leaves a lot to be desired.

The legislation was introduced in April, just as foot-and-mouth had taken a grip, the countryside was virtually out of bounds, and many hospitality businesses were struggling just to survive. The new law is also another development in a long line of complex employment legislation that has recently seen the introduction of rights for part-time workers, changes in parental leave and regulations on working hours. It's hardly surprising therefore, that many employers are either unaware of the new pension legislation, which has not exactly had a lot of exposure, or have put it low on their list of priorities.

Good employers - and there are plenty of them out there in hospitality - would agree that looking after employees makes sound business sense. Offering stakeholder pensions can be done, but, as with all change, employers need time and support to introduce a scheme that may involve increased administration or alterations to technology. What they do not need are the crippling penalties of up to £50,000 that the Government is threatening to impose on those who do not meet the October deadline.

Inevitably and sadly, those who will suffer the most from this new legislation are, as ever, the small businesses that lack the resources to put new systems into place; larger companies are more likely to have a pension scheme already and may therefore be exempt from the new rules.

The current Government has not exactly endeared itself to small businesses. It would do itself some favours now if it showed some understanding of this year's trading difficulties and offered leniency, rather than heavy fines, to employers who are genuinely committed to looking after their staff but need a little more time to sort things out.

It would be a crying shame if the entrepreneurial spirit which is now inspiring so many successful small businesses were to drown in a sea of red tape.

Jenny Webster, Deputy editor,Caterer & Hotelkeeper