Just 1 per cent of the UK’s largest employers plan to level down pension contributions for existing members as a result of automatic enrolment, research from the CBI and Towers Watson suggests.
A survey of CBI members found 80 per cent of employers have discussed how to comply with the new regulations, which come into force from October next year, at board level.
Some 61 per cent of respondents say they expect to enrol defined-contribution scheme members on their existing terms, while only 1 per say they will cut back employee pension provision.
CBI chief policy director Katja Hall says: “Our survey shows a heartening level of readiness for next year’s pension reforms among firms facing the change, with less prepared firms typically those who will not be enrolling staff for several years to come.”
Towers Watson head of UK pensions consulting John Ball says: “Although firms with fewer than 3,000 employees are being given longer to comply, it’s full speed ahead for the largest employers.
“Planning is generally well under way but the detail of the legislation holds some hidden surprises. This is a major project which employers can’t afford to leave to the last minute.”
Employers also raised concerns over the Government’s plans to abolish contracting out for defined-benefit schemes as part of proposals to introduce a single-tier state pension for future retirees.
Hall says: “Abolishing the contracted-out rebate in defined benefit schemes will significantly raise national insurance contributions, so the CBI is calling on the Government to offset these costs for employers and employees, otherwise more DB schemes could be forced to close.”