Deloitte: North East Firms Under-Prepared for Auto Pensions Enrolment

Still too few companies are adequately geared up for pension auto-enrolment, warns David Brown, director in the Deloitte Total Rewards and Benefits team in the North East. Auto-enrolment is being phased in gradually for every employer in the UK, and will eventually see every worker enrolled onto a pension scheme automatically. But too few companies have started the necessary preparations and many could be facing an administrative nightmare before their deadline. The scheme was launched by the Government in 2012, with the very largest employers required to comply first. By 1 May 2013, all employers with over 4,100 staff will need to be involved - by 1 November, it's every employer with over 500 staff. By 2017, every employer in the UK will need to offer automatic pension scheme enrolment to its employees. Put simply, not enough employers are putting enough planning into place to ensure they are geared up when their 'staging date' arrives. There was a huge advertising campaign aimed at the individuals, but the message hasn't got through to enough businesses. The sheer complexity of the task at hand is daunting enough for any employer, even those that already offer pension schemes, and we have been working with our clients for some time to ensure they can make the transition smoothly. There have been lessons learned already since the scheme launched last year but there are going to be millions more individual savers in the system. Each has to be looked at and handled individually and it's a huge administrative process that we feel many may have underestimated. We are increasingly hearing of employers that have failed to take any action yet, and, frankly, they are running out of time - it is imperative that they take advice as soon as possible to ensure they are fully geared up to offer these pensions when their deadline arrives. Brown said employers that leave it too late could struggle to find a pension provider able to work with them. Pensions underwriters are hitting the legal capacity of what they can offer because of the increased demand - eventually they could be forced to turn people away. It is an added complication to an already tricky issue.