More than two-thirds of employers may need to review their selected auto-enrolment (AE) pension scheme in the wake of the DWP’s (Department for Work and Pensions) “Better workplace pensions” consultation, according to new research from Jelf Employee Benefits.
The firm surveyed almost 200 employers in May and June this year to assess the impact the new requirements will have.
On top of the 68% who stated they would need to review their arrangements an additional 16% indicated that they had already completed a review.
New minimum standards have been introduced for AE schemes following the consultation, and the timetable for compliance has been described as tight by Jelf.
There is now to be a charge cap for the default fund of every AE scheme, active member discounts have been banned and commission that arises from AE schemes has been removed.
These minimum standards will apply to all new and existing AE schemes, and compliance on certain aspects is required by April 2015.
Steve Herbert, head of benefits strategy at Jelf Employee Benefits, said that it was genuinely concerning that so many employers intend to review their pension schemes due to the latest changes to automatic enrolment.
Herbert stressed that Jelf had no problem with the idea of minimum standards for pension schemes, but that the tight timetable meant many would face a struggle to comply.
The firm has expressed its concern that the changes have come at a time of great upheaval in the pensions industry, including reforms announced in both the Budget and Queen’s Speech this year, which may make finding professional support particularly difficult.
Herbert added that there were likely to be many employers who would need to make changes to their pension schemes over the coming 12 month period.