Reduction in reported auto enrolment numbers

03 July 2014

The lower number of employers staging in recent months has been reported in various titles recently. The coverage has looked at the possible reasons for the lower than expected number of employers, with some citing concerns there may be a compliance issue.

We are grateful to NEST for the following analysis of recent comment. Readers who are concerned or uncertain about what they need to do are reminded of the CIPP training and other support available.

The Daily Mail reported that of the almost 23,000 employers that were due to stage by May 1 this year just over 15,000 have registered with The Pensions Regulator. The article suggested that therest could be risking fines. Tom McPhail of Hargreaves Lansdown was quoted as saying it is uncertain whether the difference is due to employers failing to report to the regulator or if it means that many have not met their staging date.

An article in Money Marketing looked at the possible reasons for the lower than expected number of employers staging in April and May, suggesting there may be a compliance problem. Tim Jones was quoted saying he has seen no evidence of a compliance issue and that a possible reason for the lower number of staging employers is that ‘the incumbent providers have done more of their existing book than the model predicted.’ Aviva’s head of policy and Standard Life’s head of workplace strategy were also quoted, with the former suggesting thousands of employers may have missed their staging dates.

Pensions Expert also picked up the news, quoting Tim Jones. The piece cited figures from a recent Sage survey that found 19 per cent of respondents were not currently preparing themselves to implement automatic enrolment.

A further article in Pensions Expert by Neil Latham of Punter Southall noted the challenges ahead for automatic enrolment as smaller employers with fewer internalresourcesbegin to stage. He wrote that 'NEST has expressed concern that many employers have gone awol, which is echoed by several leading providers. This suggests employers believe they can postpone their staging date for three months and sort out auto-enrolment in three weeks, which is misguided.' He went on to say that 'many small employers will use NEST, but will have to self-serve and risk repeating the mistakes that larger employers and their advisers have addressed' and that they may encounter 'capacity issues which NEST will inevitably face'.

Elsewhere, Accountingweb quoted NEST's Paul Budgen who suggested that some employers may have opted to postpone their staging dates, though he had not anticipated that many SMEs would make use of this option.

In his Total Investor blog Henry Tapper suggested that the creation of a database for TPR to track compliance with automatic enrolment staging dates could be a solution.