Two-thirds (60%) of UK organisations do not see making changes to their defined contribution (DC) scheme as a priority in 2011, despite the proposed introduction of automatic enrolment in 2012.
According to new research by consultancy Aon Hewitt, a quarter of employers (23%) have yet to consider the implications at all, while only 12% are expecting to make any change to their DC scheme in the next 12 months. Only 5% of businesses have already made in anticipation of the forthcoming pension reforms.
John Foster, DC consultant at Aon Hewitt, said: “There are a number of key factors that should focus [organisations] of all sizes, not just the largest employers, on the costs and risks of not acting early to adapt existing arrangements.
“The proposed sliding scale (based on number of employees) of enforcement fines for non-compliance can reach £10,000 per day in some circumstances for employers with more that 500 employees. That is a very real incentive for employers to make sure these issues are flagged and addressed as soon as possible, particularly as changing payroll and HR systems can take time.”
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