UK - Two-fifths of larger employers are considering levelling down pension provision when auto-enrolment comes into force, Association of Consulting Actuaries research finds.
The trade body's survey of 210 large private and public sector employers found 41% were likely or highly likely to level down pension provision in order to mitigate the cost of newly pensioned employees.
ACA chairman Stuart Southall said: "While the full cost of auto-enrolling all eligible employees will not hit most organisations until 2017, it is only right that the costs of auto-enrolment, including the administrative challenges, are addressed and tested as soon as possible."
The survey was conducted over the summer to gauge employers' feedback on auto-enrolment and the National Employment Savings Trust. The results are to be fed into the current review of auto-enrolment views on the government's upcoming review of auto-enrolment.
The ACA also found that while 75% of employers support the principle of auto-enrolment, 70% feel the regulatory regime ‘appears complex'.
In addition, some 64% said the new rules requiring employers to re-enrol those who opt out every three years should be removed; and 75% said employees with less than three months' service should not be auto-enrolled, as required under the new rules.
And 73% wanted minimum pension contributions to be based on a percentage of basic pay rather than full earnings; while more than 60% said employers with fewer than five employees should be exempt from auto-enrolment.
The ACA has recommended a delay in auto-enrolling employees of micro employers - but with the NEST trustees having a statutory duty to advise the government on when auto-enrolment is practicable for this group.
Elsewhere, the survey found half (49%) of employers agreed with NEST, and just over half the organisations asked (52%) favour a delay in introducing auto-enrolment. Just under a half (47%) said a delay is needed until the government passes legislation to allow greater freedom for employers to offer more flexible pension designs than is possible at present.
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