A fifth (20%) of employer respondents plan to pay more than the minimum contribution required for auto-enrolment, following the contribution increase which was effective from 6 April 2018, according to research by The People’s Pension.
Its survey of 120 employers also found that 70% of respondents plan to pay just the minimum 2% auto-enrolment pension contribution from April 2018, while 68% of respondents are planning to remain paying the minimum contribution rates when they increase again to 3% from 6 April 2019.
The research also found:
- 13% of respondents plan to pay more than the minimum contribution required for auto-enrolment when rates rise to a 3% minimum in April 2019.
- 77% of respondents have communicated to employees to inform them about the April 2018 increase to the minimum auto-enrolment pension contributions.
- 47% of respondents told staff about changes to the minimum auto-enrolment pension contributions by sending out letters, 37% included it in general pay and benefits information, 30% informed employees in a team or organisation meeting and 23% emailed employees.
- 19% of respondents communicated to staff about the increase in minimum auto-enrolment contributions by asking line managers to inform their teams, 14% included messages on employee payslips, 13% used posters and 11% put information on the staff intranet.
Andy Tarrant, head of policy at The People’s Pension, said: “Employers have had a vital role in making auto-enrolment a huge success and helping more than nine million people save towards their retirement.
“As auto-enrolment faces this pivotal moment, it’s encouraging to see that the majority of employers have informed their staff about the changes. Businesses, the pensions industry and the government have a role to play in helping savers understand the long-term benefit that these increases will bring.
“These findings also show that as the minimum contribution levels increase, a growing number of employers are unsure whether to pay more than the minimum contribution. We know that the majority of employees highly value their employer pension contributions as an important benefit and consider them when looking for a new job. Increasing employer contributions above the minimum requirements, if employers can afford to, will not only help employees save for their retirement but can also benefit businesses when it comes to recruiting and retaining staff.”