1 in 5 employers happy to pay more pension contributions
As of 6 April, auto enrolment contributions increased for both employers and their employees. The People’s Pension surveyed 120 employers and discovered that 1 in 5 were planning to pay more than the minimum required by the legislation. Take a look at the new minimum levels in the table below.
In addition to these findings, 13% of the employers surveyed were also making preparations to pay more than the minimum when contribution rates increase again in April 2019. In addition to this, the survey found that 18% of employers are still considering whether to pay above the minimum in 2019 but had not made a final decision.
Despite pension matters being notoriously challenging to communicate to staff, the findings show that a high percentage of employers have actively engaged employees. Employers surveyed used one or more of the activities listed below when communicating the increases to contributions.
47% sent letters
30% updated staff in team meetings
23% sent emails
19% line manager briefings
37% included information within general pay and benefits guides
14% –messages on payslips
13% –posters in the workplace
11% –posts on company intranet
Employers play a key role in the success of auto enrolment, and these indicators suggest that the 9 million workers enrolled in schemes are being encouraged to think about their retirement planning.
“As auto enrolment faces this pivotal moment, it’s encouraging to see that the majority of employers have informed their staff about the changes. Businesses, the pensions industry, and the Government have a role to play in helping savers understand the long-term benefit that these increases will bring.
‘These findings also show that as the minimum contribution levels increase, a growing number of employers are unsure whether to pay more than the minimum contribution. We know that the majority of employees highly value their employer pension contributions as an important benefit and consider them when looking for a new job. Increasing employer contributions above the minimum requirements, if employers can afford to, will not only help employees save for their retirement but can also benefit businesses when it comes to recruiting and retaining staff.’
Andy Tarrant, Head of Policy, The People’s Pension
If you would like to review the way your business communicates to staff on pensions and auto enrolment, get in touch with our Workplace Pensions team.