As we approach the 4 million milestone for automatic enrolment, I am delighted that 99 per cent of employers have successfully enrolled their workers without the need for us to use our powers. There is real evidence that employers understand the “we’re all in” message and want to do the best for their staff.
We realise most of the hard work is still ahead of us – we will keep adapting our communications in response to changing needs and trends. One of the keys of our success so far has been gauging the mood, awareness and understanding of our audience – the tens of thousands of employers due to meet their duties in the coming months and years.
I am aware there have been concerns expressed by some pension providers that the number of employers approaching them who staged from April to July does not tally with the numbers expected to complete a declaration of compliance (registration) in the late summer/early autumn.
Some have said this is evidence of non compliance. Our research however shows the opposite is true – in fact 92 per cent of those expected to complete a declaration of compliance (registration) in the coming months are well on their way to meeting their duties.
From previous experience, we believe the majority of the remaining 8 per cent will catch up and will also meet their deadlines. That said, there will no doubt be some employers who will leave it to the last minute. We urge them not to do this – it could prove costly and if they fail to comply we will use our powers.
So why are fewer employers approaching providers than they had expected? We have evidence that many employers are not shopping around but instead choosing to stick with their existing scheme. Many are public sector organisations using public sector schemes and, of course, some employers are choosing to use the flexibility to postpone automatic enrolment by up to three months.
For medium employers, the signs are good. We expect to see that the vast majority will comply on time and this means over a million more workers newly saving for their retirement. Looking ahead, we are turning our focus to the needs of small employers.
We have said that wilful or persistent non-compliance will be met with enforcement action and penalties. Our experienced team of investigators monitor signs of non-compliance and respond accordingly. We have intelligence-led proactive compliance drives and continually examine incoming evidence across different types of business sectors.
Our compliance and enforcement work is vital to the success of automatic enrolment but our communications work is equally important. At this stage in the journey, our emphasis is still very much on education. We are focused on getting our messages out there – telling small employers what they will need to do and how to do it.
For the first time, we are using national and regional radio advertising to deliver our messages to new audiences, alongside ongoing printed press and online advertising. The message remains simple – if you are an employer, you will have automatic enrolment duties.
Charles Counsell is executive director for automatic enrolment at The Pensions Regulator