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With just months to go before the UK’s largest employers must comply with the incoming auto-enrolment pension reforms, many employers’ attention is now firmly fixed on what compliance means for their organisation.
With a number of employers reaching their staging dates next year, planning for the reforms and considering the impact of auto-enrolment and the introduction of compulsory minimum employer and employee contributions is likely to be a growing priority. This will be particularly the case as employees become more aware of the legislation as the Department for Work and Pensions sets out to educate the population through initiatives such as its television advertising campaign.
On the whole, this is something our respondents appear to have got a handle on. Just under three-quarters (72%) say they have a project plan in place, while 69% have planned their budget for the changes.
Ever since the pension reforms were first announced, much speculation and debate has taken place over the potential cost impact on organisations. But as time has passed and employers have begun to get to grips with what the reforms really mean, many of their fears that costs will be hugely inflated have, to a large extent, been allayed.
This year, three-quarters of respondents say they know how much complying with auto-enrolment will cost their organisation. In some cases, cost increases may not be as high as employers first thought. About one-third (32%), for example, calculate that costs will rise by between 1% and 9%, and 15% do not expect to incur any cost increases at all.
Whatever the impact of the new legislation for individual organisations, post-compliance, employers are likely to find that pensions are even more of a factor in positioning them as an employer of choice. Those that offer above the minimum required under the reforms are likely to be viewed favourably by both existing employees and potential new recruits. So keeping ahead of the game could be crucial in helping to build a talented workforce.
As always, we have carried out a prize draw among our respondents. The winner of £100-worth of retail vouchers is Oliver Payne, European pensions manager at Ford Motor Company.
Deputy editor, Employee Benefits magazine