More than nine out of 10 (94 per cent) employers are facing pension challenges, according to new research from Smarterly.

A survey of employers found that the most common issue cited was ensuring that staff had adequate funds when they reached retirement, with almost half (45 per cent) stating that this was a worry.

Two fifths (40 per cent) of employers said making sure employees approaching retirement had access to sufficient information was a challenge, while 39 per cent worried about dealing with higher earners who had a reduced annual allowance.

Just over a third (34 per cent) were troubled by overcomplicated administration and the same amount had issues with low engagement and encouraging employees to contribute more than the minimum contribution level to their pensions.

Alongside these findings, Smarterly revealed its research had found that almost two thirds of employers (65 per cent) did not think providers were doing enough to offer progressive products.

Over three fifths (63 per cent) wanted to see a disruptive challenger move into the pension provider space and the most common concerns employers had when choosing schemes were annual management charges, good communication and online services.

Smarterly head of proposition, Steve Watson, said: “Pensions continue to present a myriad of problems for employers but the majority all link to low employee engagement levels especially amongst Millennials.

“Our research shows that fewer than one in ten Millennials are worried about their retirement savings and 40 per cent of employers are considering offering a workplace savings vehicle such as an ISA alongside a pension scheme to support employees more immediate needs, such as getting a foot on the housing ladder. A far more engaging proposition.”

Smarterly research released in January found that more than half (54 per cent) of employers were planning to carry out a review of their current pension provider in the next six months, while almost nine in ten (87 per cent) expected to review their provider within the next year.

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