Increasing numbers of employers are feeling the burden of auto-enrolment, but is the short term pain worth the long term gain?
If the latest research by Close Brothers Asset Management is anything to go by, it’s fair to say the feeling amongst employers regarding auto-enrolment is somewhat confused.
More than three-quarters (76%) of employers who have now commenced pensions auto- enrolment say they are experiencing an administrative burden. 62% of those who have already staged are positive about the long term benefits, although 38% feel the short-term cost and disruption outweigh the long term benefits.
The greatest division in opinion is between those who have already staged and those who have not. Whilst it’s easy to dismiss the concerns of those yet to begin as pre-enrolment wobbles, those businesses are very different beasts from those with auto-enrolment systems up and running.
As smaller businesses are brought into the auto-enrolment fold, it is telling that 77% are nervous about the effect it will have, with 19% anticipating a reduction in staffing or salaries, and 16% expecting an impact on profits.
Even amongst organisations for whom pensions auto-enrolment is now a matter of business as usual, many feel they have work to do. 45% are planning to review their auto-enrolment systems, an increase from the last survey. And when asked about the robustness of their systems, employer confidence fell to 34%, a drop of 2% on the autumn figures.
The government’s position – and that of many analysts – is that the long-term benefits of auto enrolment outweigh the disadvantages. The challenge for businesses is to make the gap between staging date and long-term benefits as short as possible. That comes down to asking for the right help from the right people, because getting help from those experienced in managing the transition can help make life an awful lot easier.
If you’d like to know more about pensions auto-enrolment, or want help in making the transition easier, you can talk to us here.