“A significant challenge lies ahead,” says Laura Webb, head of membership relations, Pensions and Lifetime Savings Association
Automatic enrolment is so far proving to be a pensions success story. Employers have taken the opportunity to breathe new life into their pension arrangements and employees have been overwhelmingly supportive, with opt out rates much lower than we expected.
Since 2012 more than 5.4 million workers have been automatically enrolled into a workplace pension by almost 61,000 employers. But fewer than 5% of employers have so far automatically enrolled – a molehill in comparison to the mountain of the estimated 1.8 million or more employers, representing 90% of the UK workforce, still to go through the process by 2018.
So it’s fair to say a significant challenge lies ahead.
When we surveyed large employers in 2013 on their experiences of automatic enrolment one year on, the biggest issue to emerge was the complexity of the rules and regulations.
Many of the small and micro employers soon to go through the process will never have offered their employees a workplace pension scheme before and won’t have the internal capacity or expertise that many larger employers enjoy to take the nitty gritty details of automatic enrolment off their hands.
So it’s vital the Government and the pensions industry makes automatic enrolment as simple and straightforward as possible for these small employers if we are going to succeed in getting the nation saving.
The Pensions and Lifetime Savings Association, formerly the NAPF, knows that automatic enrolment is an important but daunting task for small and micro employers with limited resources. To help them we have launched ‘Pension Solution’, the online service designed to take the hard work out of Automatic Enrolment for small employers who are implementing a workplace pension scheme for the first time.
Pension Solution offers busy small business owners a step-by-step guide on how to get their business set up with automatic enrolment – written in the language of small business owners, not technical pensions jargon.
They will also receive templates for communicating with employees, as well as a comparison of major providers to help them choose a scheme that best suits them. The comparison tool combines objective information on eligibility, fees and Pension Quality Mark status, with ratings submitted by other employers who have used the providers – and 500 employers have already added their views.
Automatic enrolment is without a doubt the best chance of getting the UK into the habit of saving for retirement, but as the hard part begins, the pensions industry must focus on making the process as easy as possible for small and micro employers. Pension Solution does just that – check it out at www.pensionsolution.co.uk.
Laura Webb, is head of membership relations, Pensions and Lifetime Savings Association