Legal & General Workplace Savings will have auto enrolled over a quarter of a million new members into company pension schemes by the beginning of March 2013 and expect new joiner numbers to be significantly ahead of previous indications.
Minister for Pensions Steve Webb said:
"Automatic enrolment has ushered in a truly historic change allowing millions of employees to save more for the future or contribute to a pension for the first time.
"I am encouraged by what I hear from employers and pension providers about the impact of our reforms in creating a new savings culture."
Companies choosing Legal & General for their Automatic Enrolment (AE) process include:
Marks & Spencer, Barclays, National Trust, SERCO, ASDA Stores, Thales Group, Ladbrokes, Arcadia, University of Nottingham, The Co-operative Group and Alliance Boots amongst others. Many of these pension schemes had staging dates that started last year for which the initial "AE window" is now closed.
Early results indicate that opt out rates are less than 10% overall. This is well below the figure of 33%, suggested by Legal & General's consumer surveys (1) and Dept. for Work and Pensions expectations published last year (2). Pre AE Research among eligible employees (3) indicated that the 50s to 60s age group said they would be more likely to ‘opt out'.
Legal & General's Managing Director Workplace Savings, Tony Filbin commented: "We set out to deliver a straightforward, effective AE process and the early results show this is working well.
We are delighted to have delivered so many successful new pension scheme members in such a short time. Many of our clients are large employers who were the first to reach their AE staging date. Over 90% of eligible staff in the schemes that have completed staging chose to remain in their company pension, a solid endorsement of the quality of the schemes offered.
As our research predicted, those in the 30 to 40 age group are showing the lowest number of members who opt out from their first premium with over 50s returning the highest opt out rate.
These early results mean we will be administering thousands more new company pension scheme members over coming months than first thought. Our Workplace Savings business is set to more than treble in size by the end of the AE staging programme, following our significant investment in straight through processing and online tools, and is well positioned to deal with this."
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