Automatic enrolment: new forecast shows challenge ahead
Ref: PN14-01
Thursday 23 January 2014
The Pensions Regulator has today published an updated forecast of the number of employers due to become subject to automatic enrolment duties over the next four years to help the pensions industry prepare to meet their clients’ needs.
You can view the employer staging forecast in our section called help your clients prepare for automatic enrolment.
The forecast is aimed at assisting pension and payroll software providers, and financial and business advisers with capacity planning.
It underlines the scale of the challenge ahead, with around 30,000 medium sized employers reaching their ‘staging dates’ between this April and the end of the year.
The numbers show a significant increase to the volumes of employers who have staged previously. At the start of this year, a total of 5,431 employers* had completed a declaration of compliance, by registering with the regulator that they had met their duties.
The numbers should not, however, be a surprise to pensions and payroll software providers and advisers. The regulator has for some time been discussing with them how they are working to meet growing demand both in 2014 and beyond.
Charles Counsell, executive director of automatic enrolment said:
“This updated forecast is based on a clearer picture of the numbers of employers left to stage and has been developed over the first months of automatic enrolment.
“The clock is ticking for thousands of medium sized employers across the UK – employing 50-250 workers – who need to meet their legal duties to provide a workplace pension.
“Payroll software and pensions providers, financial and business advisers all have a role to play in preparing for the busy times that lie ahead. Now is the time for them to speak to existing clients about what their expectations are. They need to be clear now on what support they can offer employers, which products are suitable for their workforce, the timescales and the costs that will be involved.”
This week has also seen the start of the latest wave of advertising, in newspapers, radio and online aimed at raising awareness of the changes to workplace pensions and the actions employers need to take.
Those employers due to stage before June should by now have in place a suitable pension provider and payroll software. All employers should find out when they have to act by checking their staging date.
Editor's notes
*Employer registration information is taken from the January 2014 registration report. The report is published monthly and can be viewed in our research and analysis section.
The regulator’s ‘employer staging forecast’ is an estimate of the number of employers’ PAYE schemes expected to become subject to automatic enrolment duties. It should only be used as a broad indicator.
Eventually up to 1.3 million employers will have automatically enrolled up to 11 million eligible workers into a work-based pension scheme.
An eligible jobholder who reaches 22 and who has not reached pensionable age must be automatically enrolled in a qualifying scheme by the employer. Qualifying schemes are pension schemes that satisfy the quality criteria prescribed in the Pensions Act 2008. The criteria establish a minimum standard for the level of contributions made to the scheme or the level of benefit provided.
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 to maximise employer compliance with automatic enrolment duties.
Source: The Pensions Regulator - Press Room