Pensions - Articles - Surprise results on increase of Auto Enrolment contributions

 The survey of over 200 senior HR and Finance professionals found that more than 3 in 4 (76%) employers believed that an increase in pension contribution levels should be made. Only 15% of respondents felt that no increase was necessary.
  

  

 The findings also reveal that 85% of employers believe this increase should be borne in part, or entirely, by employers. Only 14% thought that the increase should be made only by the employee.
  

 Commenting on the results, Steve Herbert, head of benefits strategy for Jelf Employee Benefits said: ‘Frankly, we were a little surprised at these results. Many employers are yet to reach their staging date for Auto Enrolment, and a significant proportion of those who have already staged are not yet at the full contribution rate.

  

 It is therefore somewhat surprising that employers appear so supportive about a further increase to their pension contribution costs already.’
  

 He continued: ‘That said, it’s very encouraging that employers continue to see the benefits of offering a quality pension scheme. A good pension offering will obviously help employees, and will also provide an important recruitment, retention and planning tool for employers.’
  

 The survey also found that more than 4 in 10 employers would consider taking early action to increase contributions in advance of any legislated increase, thus smoothing the higher cost over a number of years.
  

 Herbert concluded: ‘Smoothing any increased cost is a pragmatic stance, and indicates that employers are now more likely to react quickly to changes in the legal minimum pension provision for employees. This suggests that employers - many of whom struggled to meet their initial Automatic Enrolment duties - may now have learned the lesson that forward planning is imperative in group pension provision.’