Opinion  

Targeting employers

Financial Adviser

Auto-enrolment has so far been a success, but that is because barely 2 per cent of the country’s employers have completed the process.

A large part of this cohort already have established HR departments and have had some contact with group pensions, and as such are aware of the need to get with auto-enrolment.

Many have been worried about what happens with the thousands of other employers who have had no such scheme, and are not up to speed with their regulatory requirements.

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The problem is that this may be the first time they have ever had any communication with The Pensions Regulator, and many will not have any knowledge about what it is, or what it does.

To be told that they need to set extra money aside for their staff as an extra cost of recruitment is probably galling, and that is assuming they have heard of auto-enrolment, and not put the letter from the regulator to one side – or even in the bin.

A vast amount of money has been spent on getting the message across to individuals to persuade them not to opt-out – the “I’m in” campaign plastered across TV advertising slots.

But perhaps some of the money should be spent on targeting employers. The Pensions Regulator has made some effort to get in touch with companies, but many employers are surprised when they discover what they have to do and in many cases have left it very late.

It is surprising that more has not been spent on targeting employers, given how much more effort they have to put in – individuals simply have to say “I’m OK with what the company has done for me”.

Auto-enrolment is one of the biggest challenges that smaller employers face, and for many will involve a massive overhauling of their payroll systems. Some money could surely be spent on getting the message across more effectively.