One in three businesses plan to pay lower DC contributions to current non-scheme members once they are auto-enrolled, compared to the current contribution levels they give to existing members, according to a survey by human resource consultancy firm Aon Hewitt. This is up on 2011’s figures when only one in seven respondents planned to provide lower DC contributions to those joining the scheme through auto-enrolment.

Aon Hewitt head of benefit design James Patten said the reduction of DC contribution levels may be a mechanism for controlling the cost of implementing auto-enrolment.

While higher numbers of businesses plan to provide schemes specifically for auto-enrolment, the survey of 119 organisations with auto-enrolment staging dates from late 2012 - 2014 also suggest that many employers aim to maintain their existing DC vehicles as their main arrangement for running auto-enrolment.

Patten said: “While 15 per cent of our respondents were yet to decide, when we compare the findings of our 2011 survey with those from 2012, it does seem likely that a good proportion of these organisations will also look to lower their contribution rates for auto-enrolment purposes.

“Many employers looking to lower contribution levels for auto-enrolment purposes are therefore likely to be doing so within their existing schemes. Given the complexity of implementation it may well be that some employers are simply reluctant to change vehicle if it means adding further difficulty to the implementation process. However, our survey suggests more employers are looking to use alternative vehicles, such as master trusts, for certain categories of workers, such as contractors.”

The survey also found that in 2012, more businesses had devised plans for the roll out of auto-enrolment compared to 2011. Three out of every four businesses in 2012 have made decisions on how they will deliver auto-enrolment, of which two-thirds plan to outsource the project.

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