The proportion of workers signed up to an occupational pension scheme could increase by over 50% as a result of auto-enrolment, according to research published by the Chartered Institute of Personnel and Development today.
Almost two thirds (62%) of workers questioned by the organisation for its latest Labour market outlook said they planned to stay opted in to their workplace pension scheme when they were auto-enrolled. If this is true of the rest of UK population it would increase workplace pension membership from 52% to 82% of the workforce, the CIPD said.
The change would be particularly marked in the private sector, where the proportion in a pension would increase from 43% to 78%.
However, the CIPD found that while 88% of employers surveyed for the report were aware of their requirements under auto-enrolment, only half (51%) had looked beyond just complying with the rules and checked their pension plans support the needs of their employees. An identical proportion had reviewed their arrangements to ensure they met the business strategy of their organisation.
Only 26% of those surveyed by the CIPD said they had begun to collect data to measure and evaluate the likely impact of auto-enrolment on their organisation and one in five said they had no intention of doing so.
Charles Cotton, CIPD rewards adviser, said: 'It looks likely that automatic pension enrolment will significantly boost the numbers of employees saving for their retirement.
'Given that the cost of pensions is a major business outlay for most employers it is somewhat disappointing that so few have started collecting data to assess the impact that these reforms may have.'
He added: 'Some organisations may feel forced to offset some of the additional costs by reducing wage growth or cutting other benefits, but it is important that employers examine how they can turn these costs into an investment that will bring a return to the organisation in the form of higher employee engagement, as well as aligning their pension scheme with the organisation's business strategy, brand and culture.'
Nearly half (49%) of employers included in the survey said they did not expect auto-enrolment to have any effect on their organisation. Of the remainder, 21% said they expected it to result in lower wage growth, while 18% expect reductions in other elements of pay such as bonuses.