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Employers are waiting for Government review before going ahead with pensions-auto-enrolment plans

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Two-thirds of companies have started to prepare for pension auto-enrolment, but many have put their plans on hold to wait for the outcome of the Government's review next month, according to a survey by Mercer.

In the survey, 68% of respondents said they had started or were progressing well in planning for auto-enrolment, though a similar number (64%) had stopped pending the results of the Government’s review next month. A further 86% have yet to check whether their scheme qualifies under the new rules.

The survey also showed that 21% of schemes believe six months is enough time for planning and implementation while 5% think three months is sufficient.

Claire Ross, head of service Implementation in Mercer’s Outsourcing business, commented: "Early preparation for auto-enrolment is important, to ensure all the payroll, administration systems, communications and resourcing aspects are addressed in time for the deadline. It appears that some companies are allowing only a very short timescale for this process but it seems the majority of companies have at least started to plan ahead.

 "An important initial step in preparing for auto-enrolment is to conduct a review of whether the company scheme qualifies under the new regime. If it doesn’t, costs and timescales will need to be agreed so the scheme can be adjusted in time for the auto-enrolment deadlines."

In the survey, 11% of respondents said they would use NEST for part of their workforce, once it is introduced. Another 39% are still undecided while a similar number (38%) said they did not intend to use NEST. Only 6%, mostly smaller companies, intend to use it as their main pension scheme.

 The survey indicated a more even split between those considered responsible for administering auto-enrolment, once a process is in place. They ranged between payroll (26%), human resources (34%), the in-house pensions manager/scheme administrator (18%) and an outsourced pensions manager/scheme administrator (16%).

 Of those surveyed, 31% said they were likely to review their non-pension benefit packages while 6% were very likely to review them; a further 23% didn't know.

 Steve Charlton, a senior defined-contribution consultant at Mercer, commented: "It is clear from the survey results that many employers are using auto-enrolment as the catalyst to review benefit structures and employee packages with the focus on savings beyond simply pensions, to address the broader range of needs of employees."