The Pensions Regulator (TPR) has published a report that shows the majority of UK employers are supportive of the increase in minimum contributions that will take effect this month.
The report provides the results from a survey of employers conducted in the fall of 2017 by OMB Research on TPR’s behalf. The survey asked employers who had completed automatic enrollment about their awareness, intentions, and attitudes toward duties relating to automatic enrollment requirements.
According to the report, at least 92% of all employers were aware of each individual ongoing duty in relation to automatic enrollment. Awareness of each of the ongoing duties ranged between 92% and 99% among micro-, small-, and medium-sized employers and approximately 90% of all employers were aware of all of the ongoing duties.
Ongoing duties include paying regular contributions into the pension, monitoring the age and earnings of staff, processing requests to opt in, join, or leave the plan, and maintaining accurate records.
The report found that the majority of employers said they don’t have any difficulty keeping up with their duties, although this varied based on the size of the company, with this sentiment being expressed by 70% of micro-, 78% of small-, and 84% of medium-sized companies..
“We have worked hard to make automatic enrolment as straightforward as possible so it’s great to hear that employers can complete their ongoing duties quickly and easily,” Darren Ryder, TPR’s director of automatic enrollment, said in release. “It is also very encouraging to note that most employers accept that paying more in contributions will build on the success of automatic enrolment. Increasing contributions is an important part of boosting retirement outcomes.”
The report said that a large majority of employers (84% of micro, and 94% of small and medium companies) were aware that minimum pension contributions are increasing this April. Some 64% of micro companies, and 77% and 83% of small- and medium-sized companies respectively knew the level of the April increase. On April 6, minimum pensions contributions will increase from a 2% total to 5%, and then to 8% in 2019.
The TPR report also found that complying with auto-enrollment was not as much of a time burden as it had been in the past. The time burden of duties per month was typically no more than two per month, with medians of around three-quarters of an hour for micro, one hour for small companies, and two hours for medium-size employers. The median time spent by small employers has fallen from 1.5 hours per month in the baseline study that was conducted in the spring of 2017. Among those using external advisers or providers, the median monthly cost reported was £18 for micro, £76 for small and £150 for medium employers.
Additionally, 97% of companies of all sizes said they were confident that their organization was fully compliant with its duties.
Tags: Pension, Pension Contributions, The Pensions Regulator, UK