Indeed, between March 2014 and March 2015, 2.2 million more employees were automatically enrolled into a pension scheme, indicating 59%* of all UK employees are now active members of a pension plan. All of these people have come from just the largest 55,000 companies – about 3% of the total companies in the UK.
“The challenges continue, however, for large and small companies,” explained Clare Abrahams, head of auto-enrolment at Aon Employee Benefits. “Larger firms are facing the first ‘cyclical automatic re-enrolment’, which means the very first companies need to repeat their duties ensuring eligible staff are re-enrolled if they aren’t active members of one. Like the first time around, it could involve extensive project management. These larger employers need to assess how happy they are with the measures and providers they first put in place to deliver auto-enrolment. While the process this time should be less onerous than it was initially, it will still need careful planning to make certain that all the employee audiences are covered, that providers can support them with any new compliance requirements, and that the Declaration of Compliance is completed by the statutory deadline.”
For the thousands of smaller firms – the 1.8 million who have to enrol eligible staff between 2015 and 2018 – it’s an extra concern as they don’t have teams of specialists to call upon to help with implementation.
Recent research from Leeds University estimates that the average implementation time for employers is about 20 days, with the ongoing amount of time needed to sustain the scheme at around three and a half days per month.
Abrahams continued, “AE will eventually need to become a business as usual process for payroll and HR, but to get to this point requires a lot of planning and implementation work. Systems integration between all project participants is central to future efficiencies.
“A success? Undoubtedly. Auto-enrolment has been an incredible, positive movement for the millions of people who are starting to save for their retirement, but the question remains whether they are getting the guidance to know if they are saving enough. The jury could be out for years, and UK companies are in the hot seat in more ways than one,” added Abrahams.
*The Pension Regulator’s July 2015 report
|
