United Kingdom

Employers burdened by AE admin

February 2015

 

Auto-enrolment administration is starting to have a significant impact on UK businesses, new research has indicated.

The latest Business Barometer survey by Close Brothers Asset Management which polled over 400 UK employers, found that over three quarters of businesses have experienced an administration increase as a result of auto-enrolment. In addition, seven per cent of employers said they have noticed a ‘significant impact’, with employees spending an additional day per month carrying out auto-enrolment related duties.

Commenting on the research, Maxine McIntyre, Head of Corporate Proposition at Close Brothers Asset Management said there was a ‘growing concern’ that employers were still not doing enough to meet and exceed their Employer Duty, although perceptions were ‘clearly shifting’ as employers were ‘coming to terms’ with the ongoing work involved in the compliance process.

The research also revealed that 45 per cent of employers said they were reviewing their current auto-enrolment processing system as a result of the increased administration, whilst 5 per cent said they would review their system if they switched payroll provider.

Clare Abrahams, Head of Auto Enrolment at Aon Employee Benefits said: “We are certainly seeing more employers thinking about how a change in pension or payroll provider will mean having to re-think, re-plan and re-implement their auto-enrolment processes, especially when some providers are still not geared up to support this. Where many were previously reluctant to spend money on solutions due to auto-enrolment appearing like a straightforward change in the law, the second time around we are seeing an inevitable change in attitudes.”

But Abrahams warned that the work involved in achieving and maintaining auto-enrolment compliance should not be underestimated. “We are seeing large numbers of employers now looking to revisit their solution since their original solution, although cheap or even free, just did not work for them,” she continued. “Employers are now starting to realise that there is a cost implicit in maintaining compliance and it is not just a one-off piece of work. Finding the right solution is more important than finding the cheapest solution as these are likely to cost them more in the long run.”

 

 

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