UK - UK companies are likely to experience the same "painful" and problematic auto-enrolment implementation as Norway firms due lack of preparation and similar complex legislation, Mercer warns.
The consultant said companies it worked with in Norway - the country introduced mandatory pension provision in 2006 - 2007 - struggled as they had left preparation too late. It urged UK companies to learn from Norway's experience.
Mercer outsourcing business auto-enrolment relationship manager Richard Tuff said: "It's tempting for most companies to leave all the preparation work till the last minute, but Norway's experience of doing so was certainly painful - for employers and providers.
"One of the unintended consequences of Norway's legislation was the extreme complexity of the auto-enrolment requirements, and the UK's regulations will have a similar effect."
When auto-enrolment begins in 2012 it is thought about 5 million workers will start saving in a pension for the first time, and some schemes could see membership double or triple.
Mercer said the eligibility criteria for different types of workers will cause problems - similar to those experiences in Norway.
Tuff explained: "The main administrative challenge will be to categorise and track employees on a continuous basis, to ‘catch' them when they became eligible for auto-enrolment. Many employers believe auto-enrolment is a one-off exercise, but it's much more complex than that."
Workers are either ‘entitled workers', ‘eligible job-holders' or ‘non-eligible jobholders' - all carry different criteria and entitlements which employers will have to monitor.
Mercer said even the most sophisticated payroll systems will need to change to map the changes.
Additionally, these systems will need to establish opt-out flags to re-enrol employees after three years if they have opted out.
It added one of the other challenges will be to deal with the administration of "exceptional" cases - ranging from expats workers with two addresses to employees with complicated working patterns.
Oslo-based Mercer principal Hallvard Müller said many Norwegian employers thought the enrolment process would run on auto-pilot but their experience was "anything but that".
He said: "Our legislation caused great confusion as it told companies what to do, but not how to do it. Many providers built free data portals but relied on simple rules and automation, and failed to take account of data quality at source."
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