More than two-thirds of employers have not begun to prepare for the 2012 pension reforms, according to research conducted by Punter Southall.
Out of the 243 respondents to the Punter Southall DC Survey, 69% have not started to look at the changes, which stipulate that eligible employees are auto-enrolled into a qualifying workplace pension.
A fewer than a third (30%) of employers believe their current scheme would be compliant with the new requirements.
Other findings from Punter Southall’s third annual survey reveal:
- All respondents were aware of the pension changes due to take place. Over half thought the impact would be positive.
- Three-quarters (75%) intend to use their existing scheme to comply with employer duties, but only 30% think that their current pension provision will be compliant.
- Affordability is the main reason (56%) employees do not join a pension scheme.
- Contributions, investments and communications were viewed as the three most important elements of any pension scheme.
- More than three-quarters (77%) of employers do not offer alternative workplace savings vehicles.
- Almost half (48%) do not offer salary sacrifice.
- More than 50% are concerned about the long-term viability of salary sacrifice.
- One-third have not considered the impact of the removal of the default retirement age.
Alan Morahan, principal at Punter Southall, said: “With major changes to the pension system now only a year away, there is an alarming gap between awareness and preparation among employers.
“All respondents knew changes are planned, but the vast majority had not yet acted. There is also a disturbing gap between the proportion of employers who planned to use their existing pension scheme to meet the new requirements (75%), and those who thought their current scheme would be compliant (30%).
“Clearly employers are aware that some changes must be made to existing schemes to comply with the new regime.”
For more articles on the 2012 pension reforms