New research from NOW: Pensions reveals that four in ten (44%) small and medium sized companies haven’t given any thought to how they’ll go about finding a pension scheme to comply with the new auto enrolment legislation.
Over a fifth (22%) intend to use their existing pension provider for auto enrolment. This comes despite growing concern that some providers will not support smaller employers’ auto enrolment needs.
Research conducted with 264 IFAs at the end of last year highlighted this concern with 86% stating that they anticipate growing numbers of pension providers will not offer their auto enrolment schemes to SMEs.
A significant proportion (14%) intend to get help from their accountant and 5% are going to consult an IFA. A small proportion (4%) are going to search the market and do the research themselves. Only 2% have already made a decision and secured a scheme.
Morten Nilsson, CEO of NOW: Pensions said: “Companies planning to rely on their existing provider are taking a gamble. The reality is not all pension providers are happy to accept all companies and all employers on equal terms. The upshot of this is day after day we hear of firms who’ve been let down at the last minute
“Speak to your existing provider sooner rather than later so you know where you stand and make sure you have alternative plans in place. NOW: Pensions accept all employers regardless of size or the nature of the workforce.”
Despite a large proportion of SMEs admitting they are yet to think about their pension scheme, over half (57%) of firms surveyed think that their choice of pension provider is either important (33%) or very important (24%). Only 8% think it is unimportant.
Four in ten (40%) believe offering a good quality pension scheme will help with employee retention and nearly a third (32%) think it will help to improve the attractiveness of their company to potential employees.
Nilsson continues: “Selecting the right pension scheme for auto enrolment is important and has long term implications for employees. Taking time to review the options that are available in the market is sensible and planning ahead will help to keep stress levels to a minimum.”
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