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  • December 2013
12

Auto-enrolment numbers pass 2 million mark

Open-access content Monday 16th December 2013 — updated 5.13pm, Wednesday 29th April 2020

More than two million workers have been auto-enrolled into a workplace pension scheme, according to latest monthly figures from The Pensions Regulator.

Pensions minister Steve Webb called the figures 'great news', saying they showed that automatic enrolment is beginning to make a positive difference to workers' retirement prospects. 'The changes to workplace pensions being introduced now are set to help millions more people to achieve many happy new years in the future,' he said.

According to TPR's December automatic enrolment report, more than 3,500 employers have submitted an online declaration of compliance.

Charles Counsell, executive director of automatic enrolment at TPR, said the watchdog expected employers to have an agreement with a provider six months before staging. 'The clock is ticking and if employers don't plan ahead they could face unnecessary challenges and costs in the new year.'

But actuaries Towers Watson questioned the accuracy of TPRs figures, saying the true number of auto-enrolled workers was hard to capture.

Will Aitken, a senior consultant at the firm said: 'These numbers also focus on workers who were already on an employer's books when the employer had to start enrolling people. Since then, new recruits who would not otherwise have joined the pension scheme will also have been automatically enrolled.

'Employers are not required to report their opt-out rates to the regulator as a matter of course, so thestatistics do not say anything about this. However, all the signs are that the overwhelming majority are staying in - in many workplaces, more than 90% of eligible staff are now in the pension scheme.'

Aitken said low opt-out rates were not just down to 'inertia' but that many of workers were glad that the hassle has been taken out of joining a pension scheme.  But the 'risk is that some of the workers will think that the government or their employer have also chosen the right amount for them to save, when the minimum contribution rates were only supposed to be a start', he added.

Joanne Segars, NAPF chief executive, added that the real test would come when small and medium-sized employers, who have fewer resources and less pensions know-how, start enrolling staff next year. 

'The challenge now is for the government and [TPR] to make sure these employers understand what they have to do to comply,' she said.  

 

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

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