By Ilonka Oudenampsen
The Pensions Regulator (TPR) has urged employers to step up their preparations for auto-enrolment, as new research has indicated that businesses are underestimating the time it will take to get ready.
Research published today showed that 98 per cent of large businesses remain confident they will be ready on time for their staging date, while 82 per cent has taken steps to prepare. However, 28 per cent of large private sector employers believe auto-enrolment preparations will take less than three months, while 20 per cent suggest it will take less than a fortnight.
TPR executive director for employer compliance Charles Counsell said: “Based on what we’ve seen so far, we estimate that it will take the average large business about 18 months to plan and get ready, including making the necessary adjustments to processes and systems like payroll, HR and pensions. Leaving it as late as possible runs the risk of making preparations more costly and complex.
“We’re writing to all large employers at the 18 months-to-go mark. Businesses with staging dates in the next 12 months should already have in place a detailed plan of action, including proposals for assessing their current pension scheme for automatic enrolment or, if necessary, considering whether they’ll be setting up a new scheme.
“All employers will hear from us at least a year before their staging date, so there’s no excuse for not knowing when these duties take effect. We are providing the support that employers will need to play their part in making workplace pensions reform a success for millions of UK workers, via online tools, detailed guidance and a checklist for selecting an appropriate pension scheme.”
Other findings included that spontaneous awareness of changes in pension law is now at 94 per cent for large employers, compared to 54 per cent for employers of all sizes, which is up 10 per cent since Autumn 2011. Prompted awareness has increased from 33 per cent to 41 per cent among private sector employers, especially among small employers (from 47 per cent to 66 per cent).
In the private sector 85 per cent of large employers have taken some form of action, compared to 81 per cent in the public sector. Two thirds of large employers have consulted another party, with pension consultants (25 per cent), pension providers (18 per cent) and IFAs (12 per cent) the main sources of advice.