Most employers take a proactive stance to ensure their staff have an adequate pension in retirement, but some feel they should be doing more
Many employers have a long history of taking responsibility for the long-term financial wellbeing of their staff . Twelve years ago, 68% of respondents to the Employee Benefits Pensions strategy research 2000 told us this was the case in their organisation. This figure has remained consistently high over the past 12 years, fluctuating between 70% and 78%.
This attitude to pensions is reflected in the actions employers take to ensure their staff have an adequate income in retirement. Although the percentages have fluctuated slightly over time, the top four most popular actions have remained unchanged since 2006 when we first asked this question. Just as they did six years ago, this year respondents placed greatest importance on: actively encouraging pension scheme membership; ensuring employer contributions are adequate; actively encouraging staff to make adequate contributions; and proactively educating staff on pensions.
It is also interesting to note what employers feel they should be doing to ensure staff receive an adequate pension in retirement, but in practice do not. In some respects, this has also changed little over the years.
Back in 2006, for example, 34% felt they should take a proactive approach to educating staff around pensions but did not. This year, 30% said the same.
Also, six years ago, 21% said they should be doing more to encourage staff to make adequate contributions. This year, 24% said the same.
Employers’ views on what they feel they should not take responsibility for are also fairly telling in light of the incoming pension reforms, which begin to take effect for the largest employers in October. Some 40% of respondents believe it is not their responsibility to auto-enrol employees into a pension scheme, while 56% do not feel they should be responsible for operating compulsory contributions for staff.
It will be interesting to see whether these employers’ views change once the new laws come into effect.