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09

Auto-enrolment main focus of HR managers, survey finds

Open-access content Wednesday 25th September 2013 — updated 5.13pm, Wednesday 29th April 2020

Preparing for auto-enrolment is now the main preoccupation of human resources and benefits managers, a survey has found.

The Aon Hewitt Employee Benefits and Trends Survey for 2013 had 39% of respondents cite auto-enrolment as their main objective over the next year, an increase from 25% the previous year.

Other issues lagged far behind, with 'improving benefit design' on 9% and 'reducing benefit complexity' at 7%.   The survey also asked about employers' state of preparation for auto-enrolment.

Among respondents, 45% had started preparation but were not yet ready, 21% were already operating auto-enrolment and 24% said they were ready for the launch. Only 3% had not yet identified the changes they need to make, while just 1% claimed not to have considered auto-enrolment's implications.

Some 46% of respondents said auto-enrolment made the operation of their defined contribution (DC) plan more complicated, with 33% setting up a new pension plan for their auto-enrolled population.

The survey also showed that 21% of employers had not yet considered the implications of auto-enrolment for pension scheme investment, while 20% had not considered its impact on investment options for their default fund. Aon Hewitt consultant Debbie Falvey said: 'Employers are clearly alive to the fact that auto-enrolment is their biggest benefits challenge at the moment.

'Preparations for auto-enrolment have moved on dramatically since our last survey, and it's reassuring that so many employers of all sizes are planning ahead. 'However, the complexity of auto-enrolment must not be under-estimated.

With almost half of survey respondents claiming that it has made their DC operations more complex, it evidently has the potential to add to the workload of those managing DC schemes'

She said take-up rates for auto-enrolment had so far proved high, with significant potential impact on costs for DC sponsors.

'Employers need to ensure they have assessed and addressed all these implications, to avoid potential nasty shocks just before their staging dates,' Falvey said.

This article appeared in our September 2013 issue of The Actuary .
Click here to view this issue

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