Employers lack the knowledge to make informed decisions on appropriate auto-enrolment solutions for their workers, according to a survey of independent financial advisers
Defaqto, an independent financial research firm polled 264 IFAs on behalf of NOW: Pensions, and found that 89% were concerned that employers would have trouble picking the right pension scheme for their workforce. The survey also revealed that nearly two thirds of IFA's think employers are 'unengaged' with auto-enrolment.
Only 5% of those surveyed believe that employers are fully aware of their auto enrolment obligations as set out by The Pensions Regulator, with 95% saying more needs to be done to ensure employers understand the long-term implications of their decisions on auto-enrolment.
Amongst those who claim more should be done, over three quarters (77%) said the responsibility should sit with the government, 75% believe it is down to the Pensions Regulator and 23% think the responsibility should be on providers.
Commenting on the findings, Morten Nilsson, chief executive of NOW: Pensions, said: 'Many employers will be approaching auto enrolment with trepidation. The advisory community has an essential role to play, guiding employers through the process and helping to ensure that the schemes they select for their employees are fit for purpose.
'Providers, government and the regulator also need to work together to ensure that only high quality schemes with low charges are permitted into the auto enrolment marketplace. Employers would then be on a firmer footing to tackle auto enrolment with greater confidence.'
Last week, a NEST survey of employers revealed a 'fundamental gaps' in knowledge, experience and expectations among those set to auto-enrol this year, which could present them with challenges in meeting the requirements. The survey also found that some employers know little about pensions and have not engaged with the detail of the reforms.