A Deloitte survey of private-sector employers, carried out prior to the publication yesterday of the Department of Work and Pensions’ independent review of automatic enrolment of employees into workplace pension saving from October 2012, found 37% of employers have not started to consider the impact of auto-enrolment on their future pension strategy.
A further 42% have not factored the expected cost of auto-enrolment pension reforms into their financial plans.Tony Clare, head of Deloitte’s pensions advisory services practice, said: "DWP’s review brings greater clarity for employers, particularly on who must be auto-enrolled and the expected costs. For larger employers who will have to commence auto-enrolment in less than two years, it is important to take action now to identify how they will be affected and to understand how their current HR processes and benefit arrangements will be impacted.
"Deloitte welcomes the optional three-month waiting period, and the proposed simplification of the certification process for employers who currently operate their own pension arrangements. We look forward to seeing how these recommendations will be set out in legislation.
"Auto-enrolment into workplace pension saving is a bold step as it grapples with the challenges presented by a rapidly ageing population and seeks to ensure that future generations are provided for in a manageable and cost effective way. The findings of the DWP review balances the need for employers to have flexibility with the need to encourage more people to save towards their retirement.
"We believe that the review findings, together with the recent proposals for a non means- tested minimum pension income, should help address many of the previously expressed concerns over whether or not it will ‘pay to save’ for retirement. Successfully bringing these elements together should create a more robust and affordable partnership between government, employers and employees, and make retirement saving choices clearer for individuals."
