The Chartered Institute of Payroll Professionals (CIPP) has unveiled its highly anticipated report investigating where organisations are in their preparations for the introduction of automatic enrolment.
The CIPP research paper to understand business readiness for automatic enrolment includes responses and comments from 267 participants, from a wide range of sectors and consists of employers, pension providers, payroll software developers and those who provide payroll services to employers.
Some of the key findings reveal that more than half (54%) of respondents believe that automatic enrolment legislation is complex. Alarmingly, a third (33%) of employers are not even aware of the legislation, with the construction industry being the most unaware.
Other findings show that nearly two-thirds (60%) of employers have assessed the financial implications to their organisation in respect of the final staging employer contribution level. Of these, around a third (35%) believe that there will be little impact on their business as the majority of their workforce (more than 75%) already participates in a pensions scheme. However, a sixth (15%) believe that the costs identified will mean that their employees will not receive a pay rise in the foreseeable future.
When asked about the administrative burdens including financial implications, more than half (57%) feel that it would have been administratively less burdensome had the UK followed the Australian model of compulsory contribution with no opt-out facility.
And interestingly, when asked whether they feel that automatic enrolment will encourage workers to save for their retirement, respondents are equally divided: a third (33%) admit that it would, a third (33%) feel it would not and the remaining third (34%) believe that it might.
Karen Thomson FCIPP MSc, Associate Director of Policy, Research and Strategic Visibility at the CIPP, said: “As we all know, 2012 is a big year for the payroll and pensions industry, with the pilot scheme in readiness for the introduction of real time information (RTI) as a statutory requirement from April 2013, as well as automatic enrolment commencing for the largest of employers taking place in the next few months.
“We thought it would be extremely valuable to conduct research to measure awareness of automatic enrolment and examine the opinions and concerns of our members and stakeholders. Our report reveals that there are still a significant number of employers who are not aware of automatic enrolment legislation and that a lot of work has to be undertaken by payroll service and software providers to educate them not only on the regulations but what is on offer to help them.
“The Chartered Institute continues to strive to be an important resource for payroll and pensions professionals by offering the most up-to-date and relevant information, guidance and tools that are much needed when dealing with the complexities of automatic enrolment.”
If you are a CIPP member, the full report can be downloaded from the Members’ Area of our website.
The CIPP will be holding its automatic enrolment roundtable in London on Friday 6 July. The write-up will be featured in the September issue of PayrollProfessional.
Finally, the Chartered Institute is launching a dedicated helpline to deal with automatic enrolment enquiries. This will be available to all CIPP members, visit our website for more information.