Firms Unprepared for their Auto-Enrolment Obligations under the Workplace Pension Reforms - ACA Survey Suggests

A survey by the Association of Consulting Actuaries (ACA) has found that firms with less than 250 employees are unprepared for pension auto-enrolment and are unsure of what their new duties will be under the Workplace Pension Reforms.

If you are an employer and fall into this bracket, please do contact our Pensions and Investments team without delay.

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  • The survey found that, to date, only 28% of firms have budgeted for the cost of auto-enrolling their employees into a workplace pension scheme. It is also suggested that those firms who have budgeted for auto-enrolment expect employee opt-out rates from schemes to be between 11 - 35%, with opt-out rates expected to be higher in the smallest firms.
  • Fewer than 1 in 5 firms are aware of the detail of the auto-enrolment regulatory regime, guidance and employers' duties. Of those that are aware of the regulatory regime, 53% said it appears 'complex' and 23% 'very complex'.

Othe key findings include:

  • Of those firms with a current pension scheme, a half are likely to auto-enrol all employees into an existing scheme - although many more are unsure compared to 2 years ago (27% as opposed to 9%). 1 in 10 will consider autoenrolling into a new workplace scheme with a further one in ten restricting entry and placing the balance of employees in NEST. Only 4% will close their existing scheme and place all employees in NEST.
  • Over 4 out of 10 firms who presently offer no pension scheme remain unsure about what they will do when they auto-enrol employees into pensions. 38% expect to auto-enrol all employees into NEST, with 19% looking to enrol into an employer's scheme.
  • Broadly only a third of firms say individuals should shoulder all of the 'investment', 'longevity' and 'inflation' risks associated with pensions. Around four out of ten firms say employers should share or take on the majority of these risks.

For more information on an employer's responsibilities and how you can prepare for auto-enrolment, click here to read an expert guide to auto-enrolment, written by our Pensions and Investments Consultants.

The full ACA report "A Million Challenges Ahead" , quoted above, can be found here.

Request more information about auto-enrolment under the Workplace Pension Reforms 2012:

If you are an Employer or Company Director and are unsure about what your responsibilities will be under the Workplace Pension Reforms and how you should start planning now, please do not hesitate to contact our Pensions and Investments team on tel: 0151 255 2300 or complete a quick enquiry form and we will get back to you with answers and a solution.

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