UK employers are not ready for auto-enrolment as part of the 2012 pension reforms, with a significant proportion yet to start preparations, according to a poll of conference attendees by Aon Hewitt.
The poll results found that over a third of the respondents’ schemes had yet to undertake pension contribution cost modelling for the impact of the new employer duties, which come into effect from October 2012.
In addition, schemes have not yet agreed key logistics ahead of implementation. Half of the conference attendees have yet to decide whether they will hold employee contributions within the organisation or transfer them to administrators.
Gail Philippart, principal consultant at Aon Hewitt, said: “New employer duties are fast approaching but, despite this, schemes seem to be ill-prepared. Many still have not even modelled the cost impact.
“One explanation might be that the work has started but communication between trustees and organisations is limited. If that is the case, organisations need to start working more closely with trustees.
“While October 2012 seems a long way off, and many organisations will have an even later implementation date, there is no simple ‘plug and play’ option.
“Auto-enrolment cannot be implemented in isolation and there are a number of issues for employers to consider that will have a knock-on effect, such as increases in life insurance premiums and IT capacity constraints.”
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