The ease and cost of auto-enrolment administration and the cost of minimum contributions are the top business priorities around auto-enrolment, according to research by the Confederation of British Industry (CBI) and Standard Life.
A view from the top survey, which questioned 226 chief executives and board members in organisations, found that lack of employee engagement (40%) and over regulation (20%) are the biggest concerns around auto-enrolment.
More than two-thirds (68%) of respondents are also concerned employees are not taking advantage of their employer’s maximum contribution rate.
Other challenges facing respondents include:
- Ongoing compliance (71%), including managing opt outs and opt ins (67%), and managing refunds (54%).
- Regulatory environment (66%) and understanding what is required (55%).
- Communicating with employees (54%).
The research also found that defined contribution (DC) pensions schemes are becoming the auto-enrolment scheme of choice, with 87% having auto-enrolled, or planning to auto-enrol, employees into an existing or new DC pension scheme.
A further 7% of respondents opted to auto-enrol staff into the National Employment Savings Trust (Nest).
More than half (57%) of respondents said they want the government to make DC schemes easier to administer.
Neil Carberry (pictured), director of employment and skills at the CBI, said: “This survey is further evidence of what I hear from CBI members up and down the country: the costs and complexities of auto-enrolment are a real concern for organisations and need to be addressed.
“The priority between now and 2015 is getting auto-enrolment to work effectively. In the survey, those that have already auto-enrolled said compliance is an ongoing burden that worries them.
“Greater regulatory flexibility would cater for that, preventing employers from havng to undertake expensive changes to their system.”