The analysts also found that three fifths of pension
scheme respondents said a lack of understanding of the true costs in
auto-enrolling staff members was causing them to hesitate with plans for
Clear Path said that, while the Department for Work and
Pensions has launched an £11m education campaign to raise awareness among
employers and employees, more needed to be done to help businesses. Larger
businesses begin introducing auto-enrolment in October.
In particular, it called for support so that small and
medium-sized enterprises can learn from the experiences of larger companies,
many of whom are on track to meet their deadline to introduce auto-enrolment
Last week, DWP set out anew timetable for auto-enrolment, with smaller businesses given more
time to prepare for the reforms in light of the current financial situation.
A new report published by Clear Path Analysis today recommends
ways to overcome the challenges involved with the change. The report
was sponsored by HSBC, whose UK head of sales for commercial wealth management,
Martin Bowmer, said it was important for businesses to plan ahead for
introducing the new system.
‘Regardless of the size
of business, it will mean additional administration and potentially significant
cost implications,’ he said. ‘For many employers, particularly SMEs,
auto-enrolment will be seen as simply more bureaucratic red tape, but by
planning ahead the burden may not feel as great when the date to comply with
the new legislation arrives.’
Rob Pearce, head of
workplace retirement services at the bank,
are clearly placing auto-enrolment to the bottom of their to-do list and may
not worry about it until it is too late. Putting arrangements in place will
take time and learning from the experience of other larger companies can help.’
In particular, Mr Bowmer
highlighted the ongoing administrative tasks for businesses affected by
auto-enrolment, such as identifying, enrolling and providing information to new
employees and organising refunds for those who opt out of the scheme.
He noted, however, that specific guidance was
available for businesses from the Pensions Regulator, while support could also
be obtained from advisers and accountants.