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UK employers are ‘on auto-pilot’ for auto-enrolment, according to pensions consultancy report

Employers have failed to take the right steps to assess the true cost of auto-enrolment, according to pensions consultancy, Punter Southall.

More than half of respondents (55%) believe their current contribution structure meets regulatory minimum requirements when, according to but the survey reveals, it falls "well short".

Less than half (45%) of employers can pinpoint the date they have to comply with the new duties even though they were surveyed before the Government's decision to put back the staging date for small and medium-sized employers.

Just 5% intend to "look seriously" at using the state-designed vehicle for auto-enrolment, National Employment Savings Trust (NEST). This is down from 13% in last year's survey and comes as the UK-wide awareness-raising campaign is underway.

Despite extensive media coverage of the challenges facing pension schemes, 70% of employers say members do not ask about the impact this could be having on their own savings.

Alan Morahan, head of DC consulting at Punter Southall, said: "It's alarming that companies believe they are prepared. Our findings suggest they are not as far down the line as they should be. These are responsible and committed employers but this is complex new territory and our research indicates they need support to navigate a course that's suitable for employer and employee.

"Employers need to be hands-on, not on auto-pilot. They know it is coming but do they know how to adjust their contribution model, their communications and their understanding of the regulations to ensure they have in place something that is robust, resilient and fit-for-purpose?"

More than 150 employers took part in November and December last year. Ten per cent were FTSE 250 companies across the industrial and occupational spectrum.