NEW PENSION LAWS POSE GREATEST CHALLENGE TO FINANCE DIRECTORS
19 Sep, 2012
New pension laws pose the greatest new legal challenge to UK-based Finance Directors and their organisations, according to new research by The CA magazine in partnership with law firm DLA Piper.
In a survey of nearly 300 members of ICAS, the professional body of CAs (Chartered Accountants), Financial Directors and Chief Financial Officers were asked to name one piece of legislation, recent or forthcoming, which poses the greatest challenge to them and their organisation. A third of UK-based FDs (32 per cent) cited pension legislation, followed by health and safety laws (17 per cent) and The Bribery Act (17 per cent). Other employment issues such as changes to maternity and paternity rights accounted for a further 18 per cent.
Starting from October 2012 employers will begin to automatically enrol eligible workers into a qualifying pension scheme and contribute to that pension. People who are automatically enrolled will also contribute to the scheme and get tax relief. New measures include allowing companies to defer automatic enrolment for up to three months and simplifying the scheme certification process.
The survey also underlined the importance of the FD/CFO community to the UK’s legal profession. More than half claim to have responsibility for purchasing legal services. When it comes to selecting that legal advice, FDs rank technical and sector expertise over all other criteria, including partner and firm reputation, location and price.
Over the next twelve months, employment and benefits are likely to be the main reason for buying legal advice (cited by four in ten FDs), followed by real estate (33 per cent), M&A (32 per cent), litigation (30 per cent) and restructuring (27 per cent).
Simon Rae, Managing Partner, DLA Piper in Scotland, said: “Among the many obligations that finance directors face these days, legal requirements continue to figure prominently. The consequences of turning a blind eye to these are well documented as is the fact that ignorance is no longer a defence. A number of issues have the potential to keep finance directors awake at night. However, having the right specialist advice and policies in place and a close eye on the related risks can lighten the load.”
Robert Outram, editor of The CA, said: “Despite a series of campaigns aimed at cutting ‘red tape’, the obligations placed on company directors, and the potential sanctions that could follow if those obligations are not met, warrant being taken very seriously. It is not surprising that pensions auto-enrolment, which will ultimately affect employers of all sizes, is high up on the FDs’ ‘to do’ list.”