EXCLUSIVE: Auto-enrolment has increased costs for 50% of organisations

increased costs

EXCLUSIVE: Pensions auto-re-enrolment either has increased or will increase costs for 50% of organisations, according to research by Employee Benefits and Barnett Waddingham.

The Employee Benefits/Barnett Waddingham pensions research 2018 report, which was published in December 2018, canvassed 246 respondents, and found that the proportion of those who felt that auto-enrolment caused increased costs had risen to 50%, from 37% in the previous year.

The second most common impact of auto-re-enrolment is that organisations have introduced a wider pension and pension saving communications strategy, as this option was chosen by more than two-thirds (36%) of respondents.

This year, the question of how auto-re-enrolment is affecting organisations was expanded to include options that had previously only been asked of a specific set of respondents. These relate to particular changes or reviews that might have been undertaken. Among these expanded options, the most popular answer is that organisations have changed or reviewed, or will change or review, their pensions communications strategy, which garners 34% of the overall response. This option takes the third spot overall.

Reviewing or changing default funds or investment options have both reduced substantially in popularity, losing 20 percentage points each this year, while reviewing or changing pension provider was selected by only 17% of respondents, compared to 33% of those asked previously. This might indicate that last year’s figures reflected a flurry of activity, as a considerable proportion of UK employers experienced auto-re-enrolment for the first time, which may now have plateaued.