The research suggests that not only do some employers lack knowledge about pensions, but they haven’t engaged with the detail of the reforms – for example, only 53 per cent of employers staging between February and July 2014 are aware that they can postpone enrolments for up to 3 months, with only 12 per cent planning to do so. This compares with around half of 2013 stagers applying a waiting period. The employers NEST interviewed found it difficult to map out the process they intended to follow as they had limited knowledge of the details of the reforms. The reality gap Results from TPR’s latest tracking survey with employers found that only one in 10 employers staging in 2014 say they plan to leave it as late as possible to comply. This plan to be ahead of their deadline is at odds with the insight that only 23 per cent of employers staging between February and July 2014 have both confirmed the provider they’ll use and that they’ve done everything else they need to do in order to be ready to comply. This suggests that employers are not getting the message that they need to plan ahead, and are underestimating how much work is involved and how long implementation may take them. The CIPP has been impressed by the way in which employers and payroll software providers have embraced automatic enrolment in 2013. 2013 also saw the Minister of State for Pensions, Steve Webb demonstrating that he has listened to employers, payroll software providers and representative bodies to help simplify some of the very complex rules. However where will we be in 2014? The CIPP still has major concerns for the smaller employer, in particular those who are due to stage between May and July 2014. It is critical that businesses understand their obligations to ensure they don’t fall foul of the legislation. No one knows what the capacity capability of the pensions industry will be and we hope businesses and employers have seen the adverts and talked to their pension providers or financial advisors to ensure they are ready. A lot of middleware products have come on to the market and employers need to weigh up the costs versus administration. Different products will be required depending on what the employer has in place now, or might need in the future to meet their obligations. One point to bear in mind is that if 30,000 employers all go to their pensions providers, middleware or payroll software provider in the month before they are due to stage they will likely not meet their staging date! The CIPP would urge all employers due to stage next year to plan now - don’t be left behind. Supporting this research, the CIPP has recently launched the automatic self-assessment exercise to assist employers with ensuring their readiness for automatic enrolment. Details can be found here . CIPP comment (from page 58 of Nest insight)
‘NEST insight’ annual research report can be viewed on the CIPP website .
Give pension opt-outs ‘lost contribution’ statements, think-tank urges
29 January 2014
Employees who opt-out of workplace pensions should be given regular ‘statements’ of their lost employer contributions, tax-relief, and what their pension pot would have been worth - to encourage them to opt back in.
CIPP Policy News Journal
16/04/2014, Page 405 of 519
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