Research from Close, which provides financial education services in the workplace, has found that a majority of employers are unaware of auto-enrolment for pensions schemes, which is due to be introduced to some companies next year and will become a legal obligation for all in the next few years.
The survey shows that 61% admit to this serious gap in their knowledge, which could significantly affect their staff’s retirement plans.
Pensions auto-enrolment, widely known as NEST, has been in consultation since July 2007 with several developments to what were originally known as Personal Accounts. Depending on the size of an organisation, the introduction of NEST could start from as early as 2012, meaning that employers have to start thinking about the impact it may have on their organisation now.
Amongst the employers who are aware of the impending changes, two-thirds (65%) stated that they will be providing extra training to help their staff understand the implications of an auto-enrolment pension scheme. However, this suggests that the remaining third intend to leave their workers with no further training on the topic.
Of those who are not providing any training on auto-enrolment, 40% of employers believe that their workers will already receive the information in another way (such as a brochure) so they will not need to provide anything extra. A further 18% believe that employees will already understand the issues. However, 14% confess that cost is the major barrier to providing this service.
Jeanette Makings, director of financial education services at Close Asset Management, commented: “It is concerning to discover the low level of awareness around auto-enrolment, especially this far into the planning process of NEST and just round the corner from implementation. Employers will want to confirm how these changes will affect them and their employees, and they should act now to make sure they are prepared by 2012.
“Whenever there is a change to workplace legislation, there is a period of adjustment for both employer and employee. Workers are looking to their employers for advice and guidance, and the research shows that there is a real opportunity here for businesses to foster trust and engage with their staff.”