More employers answering automatic enrolment call to action
Ref: PN13-31
Tuesday 20 August 2013
Research released today shows employers are beginning to recognise the need to allow time to plan for automatic enrolment, but many could face a steep learning curve to be ready on schedule.
To avoid problems, employers should check their staging date and start their automatic enrolment plan.
The proportion of medium employers who have drawn up plans and started to act on these plans has increased significantly compared to Autumn 2012, from 13% to 27%. The first wave of medium sized employers, those with between 160 and 250 staff, are due to stage in April 2014. These employers should now be making sure they have compatible payroll software in place and be well on way to selecting a qualifying scheme that suits their workforce.
The Pensions Regulator’s survey also indicates awareness of automatic enrolment remains high amongst all sizes of employers and attitudes supportive of the policy. Large and medium employers are significantly more positive about the changes than they were a year ago.
80% of medium employers believed automatic enrolment is a good idea for workers compared to 64% in Spring 2012.
But the regulator is warning against complacency, as the research shows levels of detailed understanding remain unchanged and awareness of the need to complete registration by declaring compliance information to the regulator after staging remains low.
The Pensions Regulator’s executive director of automatic enrolment Charles Counsell said:
“The response of the largest employers to automatic enrolment has been positive and at the start of August more than 1,600 employers had returned their compliance declaration to us by registering their information.
“But the vast majority of employers are yet to go through automatic enrolment, with tens of thousands of medium sized companies due to stage in 2014. Our call to action to employers to know your staging date and make a plan are more relevant than ever.
“This research is a key element of our understanding of how employers are responding to their new duties. We have tools and information on our website including a timeline planning tool and a suite of new guides to help employers with limited pensions experience to select a good quality scheme for automatic enrolment.”
Go to research and analysis to read the Employers' awareness, understanding and activity relating to workplace pension reforms Spring 2013 report in full. You can also find a technical report that includes the full data.
Key findings include:
Awareness
Awareness of the changes in workplace pensions law remained high among all employer sizes. As in previous waves, awareness was lower among micro-employers (61%) than large employers (99%).
Awareness of the details of the reforms remained low in terms of the types of people who need to be assessed for automatic enrolment, the eligibility criteria and the types of earnings that need to be taken into account.
Progress
Significantly more large (62%) and medium employers (52%) felt the process would take four months or longer than in Autumn 2012 (49% and 43% respectively).
A larger proportion of medium employers (up 11% to 84%) and micro-employers (up 12% to 30%) had started their preparations than in autumn 2012. 40% of small employers had started a plan.
41% of small employers said they would ‘leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment’ consistent with 40% in Autumn 2012.
Confidence
Most large employers (99%) were confident that they would have done everything needed by the deadline.
Small employers, who are not due to stage until after June 2015, remain positive about meeting their deadline. 57% were ‘very confident’ and 23% ‘fairly confident’.
Three out of four micro-employers (74%) were confident they would be ready for their deadline.
Editor's notes
The purpose of the regulator's employer tracker survey is to determine awareness, understanding and activity relating to workplace pension reforms.
This research took place in April / May 2013. A total of 639 telephone interviews were completed with employers due to stage from November 2013 onwards.
This document reports on four organisation sizes: large employers (250-799 employees), medium (50-249 employees), small (5 to 49 employees), micro-employers (one to four employees)
Between October 2012 and February 2018 employers will be required to automatically enrol all their eligible jobholders into an automatic enrolment pension scheme and make a minimum contribution of a jobholder's qualifying earnings into the scheme (this contribution will be increased in phases).
The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members' benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes and maximise employer compliance with automatic enrolment duties.
Source: The Pensions Regulator - Press Room