The Chartered Institute of Payroll Professionals (CIPP) has unveiled its second annual report on pensions automatic enrolment, investigating the position of the industry six months after the largest of organisations commenced their full automatic enrolment duties on 1 October 2012.
The CIPP second research paper to understand business readiness for automatic enrolment includes responses and comments from 95 participants from a wide range of sectors and consists of employers, pension providers, payroll software developers and those who provide payroll services to employers.
One of the key findings revealed that, unlike the 2012 results where a third (33%) of respondents stated they had not heard of the legislation, all respondents involved in the 2013 survey have. However, it is worth pointing out that nearly three-quarters (71%) of employers who participated in the 2013 research believe that the automatic enrolment legislation is complex, a significant rise from 54% in 2012.
Other interesting findings showed that:
• Whilst the majority of respondents are set to stage in 2013, 39% had a staging date in 2014 compared with just 13% in the 2012 research;
• 62% have a qualifying pension scheme in place compared to 50% in 2012;
• More employers have carried out workforce assessments meaning they will be better equipped to understand the implications on their business;
• Most employers expect less than 25% of their workforce needing to be automatically enrolled and the same in respect of expected opt-out rates;
• The majority of employers intend to use the postponement process, with the main reasons being to assist with pro rata pay periods and casual employees;
• The majority of employers are aware of their software capability. However the results show a higher than expected percentage of those who use a part or fully outsourced service are yet to discuss their Service Level Agreements; and
• Payroll software and service providers are advising their clients on their products and services in 2013; this was, in 2012, one of the major issues concerning employers and the business community who were publicly stating they didn’t know what their providers were going to offer.
The last point is of particular significance to our clients who use the payroll services of Payplus and Virtual Business Source. We are in the process of delivering a major upgrade to our payroll software which will take away the burden of auto enrolment for clients who would like to add on this service.
Watch this space!!