Two out of three UK employers intend seeking specialist outside auto-enrolment advice, says The Pensions Regulator – a figure which represent nothing less than a golden opportunity for the professional pension trustee and other pension industry experts.
By now, more than 100,000 independent financial advisers, accountants and HR professionals should have been contacted by the regulator advising them of their role in workplace pensions reform.
The mass communications strategy was launched in March of this year in a bid to raise awareness among advisers who, according to the regulator, are crucial to the success of workplace pensions reform.
The hope is advisers will help raise awareness of changes in the law and of the need of every employer to act.
A survey by the regulator found two-thirds of employers intended to take specialist external auto-enrolment advice, with the majority opting to approach accountants or IFAs. Nearly 70% of HR professionals surveyed plan to give advice to employers or had already done so.
Charles Counsell, executive director for employer compliance, said at the launch of the strategy the regulator expected to send around 100,000 letters and over 30,000 targeted emails to IFAs, accountants and HR professionals.
These would act as a reminder of the new employer duties and the crucial role that these advisers would play as employer clients approached their staging dates.
Mr Counsell said, “So far, we’ve issued over 200,000 letters and emails to advisers, industry bodies and individual employers, and we’ll keep utilising direct communications where we feel the need is greatest. This is about making compliance as easy as possible for employers, and the first part of that is making sure that they understand their duties and are able to get help from those around them.”
The regulator intends writing to every employer at least twice as their staging date approaches, and has educational materials available on its website for anyone interested in auto-enrolment – from pension consultants and large employers, to small businesses and their advisers.
Between October 2012 and April 2017, employers will be required under the reforms to automatically enrol all of their ‘eligible jobholders’ into a qualifying pension scheme. They’ll also have to make contributions towards the scheme.
An eligible jobholder is a worker who is aged between 22 and state retirement age, ordinarily works in the UK, and earns more than the minimum earnings threshold.
According to government figures, an estimated 9-10 million people will be eligible for automatic enrolment into a qualifying workplace pension scheme. Estimates also suggested that 2-4 million individuals would opt out of automatic enrolment.
Levels of participation and opt-out are difficult to predict, says the government.
Survey results published by the National Association of Pension Funds (NAPF) in October 2011 indicated that 27% of people thought it unlikely they would remain in auto-enrolment schemes, while 57% said it was likely and 16% were unsure.
The NAPF suggested that a proportion of the “unsure” respondents might also opt out, and they concluded that overall one in three workers – around three million people – might opt out.
Of those who told the NAPF survey they would opt out, nearly 48% said they could not afford the contributions, 29% said they did not trust the government and 26% said they did not trust the pensions industry.