A quarter of employers who have yet to pass their staging date are unaware that they would be required to automatically enrol all eligible workers into a qualifying scheme, according to research commissioned by the Department for Work and Pensions.
In a survey of more than 3,000 private sector employers by National Institute of Economic and Social Research and TNS-BMRB Social Research on the effects of the workplace pension reform, the majority of employers (59%) were unaware of the minimum requirements regarding contributions. Ignorance of auto-enrolment obligations tended to be more prevalent among small firms, the NIESR said.
Recent UK workplace pension reforms were introduced for the largest employers in 2012 and will apply to all sizes of companies by April 2018. The reforms require employers to auto-enrol all eligible staff into a pension scheme and to make a minimum contribution.
But the Employers' protection provision survey warned that there would be serious challenges ahead and employers would need greater support in ensuring they are ready to comply with the reforms.
Lucy Stokes, co-author of the report, said: 'The increase in pension scheme membership among private sector employees is a positive sign. However, these preliminary findings also show that there are still significant challenges ahead.
'Among employers yet to pass their staging dates, many do not currently have a workplace pension scheme in place, and a sizable proportion are uncertain about their plans.'
The survey also found that around 12% of firms that had not staged already had members in a workplace pension scheme. The majority (59%) of these employers expected to retain their existing scheme for current members once they begin auto-enrolment.
However, there is considerable uncertainty among employers who have not yet staged about where they would enrol new members.
The survey also showed that private sector pension scheme membership grew from 26% in 2011 to 35% in 2013. Employees who opted out, or left a pension scheme after being auto-enrolled was between 9% and 10%, it noted.