The UK is moving from being a nation of pension shirkers to pension savers.
Speaking at the NAPF’s annual conference, Joanne Segars (pictured), chief executive of the National Association of Pension Funds (NAPF), said: “I think I can see the green shoots of pensions recovery. [Auto-enrolment] opt-out rates are far lower than any of us expected last year. That’s fantastic news.”
According to the NAPF’s Automatic-enrolment: One year on report, published at the event, there is a growing confidence in pensions, which is highest among those that have already been auto-enrolled or who are members of their organisation’s workplace pension scheme.
Many respondents are confident that their employer has chosen a good scheme for auto-enrolment, reinforcing the need for employers to ensure that they do so.
The report also identified four main lessons for employers still to auto-enrol: complexity, capacity, change and communications.
“Even the large schemes said the rules were too complex and can be a disincentive to do more than the statutory minimum,” said Segars. “We don’t want small schemes to be so overwhelmed that they do things badly, or not at all, with risk of high opt-out levels.
“So, we need a re-think on the appropriateness of the current rules and regulations in the light of this experience.”
She added that employers should also use auto-enrolment as an opportunity for change.
“It’s about recognising that auto-enrolment is not the end of the game,” Segars said.
“There’s scheme-driven change, with schemes trying to improve their governance, investment defaults, and rationalising or consolidating pension arrangements within an employer.
“Then there’s the externally-driven change, with the ending of contracting out a big issue looming large for schemes.
“There are real concerns about when and how the scheme-driven change will get done because of limited budgets and resources.”