Over 70% of larger employers havent completed plans for pensions auto-enrolment with only nine months to go before the system begins to be put into operation, according to research by Clear Path Analysis.
30 JAN 2012 | THE ACTUARY NEWSDESK: NICK MANN
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 appropriate schemes.
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 for employees.
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, added: 'Businesses 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.