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Only 4% to use NEST for auto-enrolment, says Xafinity

More than one in three pensions and human resources professionals are yet to decide which pension scheme they will use for auto-enrolment, but only 4% plan to use the government’s National Employment Savings Trust.


24 MAY 2012 | THE ACTUARY NEWSDESK: NICK MANN

Research published by Xafinity yesterday found that 35% had yet to choose a pension vehicle for complying with auto-enrolment, less than six months before its staged introduction begins in October 2012.

Almost half (47%) of those questioned said they planned to use their existing pensions arrangements to automatically enrol all employees into a workplace pension scheme.

Another 13% said they would make new arrangements, but less than one in 20 respondents said they planned to use NEST in conjunction with another vehicle. NEST was established to offer employers a low cost alternative to established private sector pension providers.

Ken Anderson, the company’s head of defined contribution solutions, said: ‘The results reveal that many companies are still undecided about their preferred option for auto-enrolment.

‘With many companies just a few months away from its implementation, this is now a cause for real concern as the survey also highlighted that 40% of companies were unsure as to whether their existing payroll and HR system could manage auto-enrolment, or considered that it definitely couldn’t.’

In a separate statement, JLT Benefit Solutions warned that the complexity of preparing for auto-enrolment meant companies would need at least 12 months to finalise and implement their strategy for it.

Recent NEST research found 50% of employers with 5,000 or more employees had yet to choose a scheme. Mark Pemberthy, JLT’s director for employment benefit solutions, said these employers ‘face a real risk of running out of time and potentially facing capacity challenges in securing the support they will need from providers and advisers alike over the accelerated implementation timescales they will leave themselves’.

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