Personal Accounts could put a £3bn bill on the desks of UK companies, says Mercer.

The financial consultant is concerned that the new regulations, due for introduction in October 2012 and which will require all businesses to automatically enrol all staff into a qualifying pension plan, will pack a powerful punch to remuneration accounts.

Steve Charlton, principal at Mercer, commented: "The introduction of auto-enrolment will have a dramatic impact on company remuneration budgets, especially for those companies with a low current uptake of membership in their pension schemes. In today's recessionary environment employers cannot contemplate simply absorbing this level of increased cost.

"Planning ahead by identifying the likely cost and considering the options available for mitigating this or spreading it over a longer period will help soften the impact on company balance sheets."

A new tool has been launched by Mercer to enable companies to measure the future impact that Personal Accounts are likely to have on their budgets. The Personal Accounts Costs Estimator (PACE) measures existing costs against future employment figures, and takes multiple scenarios into accounts. The consultant has also launched a dedicated Personal Accounts website with information and background on the situation and issues surrounding the new Government plan.

"Current advice and literature on Personal Accounts seem to focus mainly on compliance issues. However, enrolling what might be a large proportion of the workforce into a pension schemes overnight must be considered a wider benefit strategy and design challenge," Charlton added.

The measuring service is available here.

- Pensions Age February 2009

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