Employers aim for increase in pension contributions

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More than three quarters of employers believe that there should be an increase in pension contributions, according to Jelf Employee Benefits.

In a survey of over 200 senior HR and finance professionals it was revealed that 85 percent of employers believe this increase should be borne in part, or entirely, by employers.

Commenting on the results, Steve Herbert, head of benefits strategy for Jelf Employee Benefits said:

“Frankly, we were a little surprised at these results.  Many employers are yet to reach their staging date for auto-enrolment, and a significant proportion of those who have already staged are not yet at the full contribution rate.  It is therefore somewhat surprising that employers appear so supportive about a further increase to their pension contribution costs already.

“That said, it’s very encouraging that employers continue to see the benefits of offering a quality pension scheme.  A good pension offering will obviously help employees, and will also provide an important recruitment, retention and planning tool for employers.”

The survey found that more than four in 10 employers would consider taking early action to increase contributions in advance of any legislated increase.

Herbert added:

“Smoothing any increased cost is a pragmatic stance, and indicates that employers are now more likely to react quickly to changes in the legal minimum pension provision for employees.  This suggests that employers – many of whom struggled to meet their initial Automatic Enrolment duties – may now have learned the lesson that forward planning is imperative in group pension provision.”

The implementation of auto-enrolment means that every employer with at least one member of staff is responsible for enrolling eligible workers into a workplace pension scheme and making contributions towards it.

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