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Employers yet to stage could face a "data headache" around auto-enrolment, says CEO Now Pensions

Smaller companies yet to stage for auto-enrolment are facing "big problems" if their HR departments haven't properly prepared and have inaccurate data, CEO at Now Pensions Morten Nilsson has said.

Speaking to HR magazine, Nilsson said auto enrolment has provided HR with a "great opportunity to improve its processes and data".

He said: "As well as problems with data, HR must ensure effective communication across all levels or be left with a headache."

Nilsson added: "As we are now into the stages of smaller companies who have fewer resources, it's increasingly important they prepare well in advance of their staging date."

Today marks the latest auto-enrolment milestone, when employees in organisations with 4,100 to 5,999 workers will be automatically enrolled into a company pension scheme.

Punter Southall health and protection consulting (PSHPC) said this latest staging date will bring more people into a system that incorrectly links group risk and pensions.

"We estimate companies with more than 500 staff in the UK are already carrying approximately £9.36 million of un-insured liability, and auto-enrolment is just adding to the problem," said PSHPC director John Dean.

"Auto-enrolment means millions of employees will start to be defined as pension scheme members, with all the group risk entitlement this theoretically brings."

Dean continued: "Added to this is the fact that any opt-outs and re-opt-ins will create a constant flow of people and leaving and then rejoining the company pension scheme, causing huge data problems."

Last week, figures from The Pensions Regulator revealed 308,000 employees have been automatically put onto pension plans out of the two million-plus workers at the 84 employers that staged between last July and the end of March 2013.

Official figures for opt-out rates won't be released until the summer but Nilsson said "any figure under 20% is good news".

"The figure I've heard and seen so far is under 10% for people deciding to opt-out, which is extremely good news for the scheme - but it's too early to say for sure just yet," he said.