Advice to give employees and employers

But Dale Critchley, technical reform manager of Friends Life, points out that automatic enrolment was just a nudge in the right direction.

“It is not the complete answer to providing a decent standard of living in retirement.

“Employees who are automatically enrolled still need to set their own targets for income in retirement and work out how they will be able to afford the kind of contributions necessary to achieve that goal.

“It is still important for workers to review the level of their contributions and where they invest them. Default contribution levels and investment strategies may not be the answer for them.”

Many staff may be inclined to view auto-enrolment as a cost, adds Alistair McQueen, senior pensions manager at Aviva. He believes the adviser should help change their mind-set from one of cost to one of investment.

When speaking to employers, stressing the importance of the right project team is vital. The right project team should include an adviser who knows the rules and can apply them to deliver the best outcomes for the business.

According to Dale Critchley, technical reform manager of Friends Life, the rest of the team should include a pension provider, payroll specialist, a decisions maker on employee benefits, someone with responsibility for employee communications and any third party service providers being used.

Not all of these will be needed all of the time but Mr Critchley said each need to be engaged at the outset. Planning early is also key, he says.

Department for Work & Pensions adverts suggest employers may need up to 18 months to effectively plan for automatic enrolment and, according to Mr Critchley, empirical evidence suggests many of the early schemes staging underestimated the scale of the changes.

Mr Critchley says: “Understand why they have a pension scheme and get the design right, this is an opportunity to take stock and put in place a key benefit that will affect the lives of almost every employee.

“Concentrate efforts on getting data and data flows right, without this it will be a struggle to fulfil all of the duties within the timescales allowed.”

Keep things simple, says Mr Critchley, as the rules are complicated enough.

He concludes: “Complex scheme structures increase the opportunity for error and should only be introduced where they will be appreciated by employees and deliver a return on investment to the employer.”