Aon surveys auto-enrolment landscape
by Gill Montia
Story link: Aon surveys auto-enrolment landscape
Aon Hewitt has launched its latest benefits & trends survey, which highlights the challenges UK companies face when developing employee benefits programmes.
According to the study, the three most pressing issues are: managing cost; addressing low levels of employee engagement; and dealing with legislative changes.
Auto-enrolment, where employees will automatically join a company pension scheme, was found to be the biggest priority for 2012.
Companies with over 10,000 employees are scheduled to implement the scheme in October this year and one fifth of respondents said they either already operate auto-enrolment or are ready for it.
Two thirds of those surveyed are in the process of rolling out their implementation.
However, this means that 80% of companies are still not operational.
Given that auto-enrolment is being phased in according to company size, some companies will be more advanced than others and the research indicates that 46% of respondents with over 10,000 employees are ready or already operate an auto-enrolment model.
Forty per cent of companies with between 5,000 and 9,999 employees indicated that they were at a similar state of readiness.
Meanwhile, 50% of organisations with fewer than 1,000 employees have yet to start their preparatory work.
Aon Hewitt’s defined contribution consultant, John Foster, comments: “Overall, auto-enrolment’s imminent implementation explains why DC schemes have this year become a priority area of focus compared to 2011: it is a major project, with a knock-on effect on many other business functions such as IT and payroll.”
He adds: “Internal communication and keeping employees engaged throughout this complex process have also been cited as key challenges by over 70% of respondents.”
The survey polled 185 companies throughout the UK, representing a combined global workforce of 650,000.