AUTOMATIC ENROLMENT
Synopsis: This offers a brief summary of the latest DWP report on its qualitative research undertaken with employments reaching their auto enrolment staging dates between January and July 2014.
In early January, the DWP published its latest qualitative research undertaken with employers reaching their auto enrolment staging dates between January and July 2014.
This Bulletin will provide a brief summary of the report, and more detail are available on worker opt-outs and employer experiences here and here.
Summary
This report provides the findings from a study commissioned by the Department for Work and Pensions (DWP), to evaluate employers’ and workers’ experiences of automatic enrolment. The research was designed to assess the impact of automatic enrolment on employers and their organisations. In particular, it sought to measure opt-out rates and understand their impact on pension scheme participation.
The report found the number of eligible jobholders to left the QWPP within the first two to three months of being auto enrolled (i.e. not those who exercised their statutory opt-out), but also those who left subsequently, was typically in the order of 14%.
Typically employers, with fewer workers tended to look to an existing contact for their first port of call for help with the discharge of their AE obligations.
Background
The workplace pension reforms require employers to automatically enrol all eligible workers aged between 22 and State Pension age (SPA) into a qualifying workplace pension scheme. Workers have the option to leave the scheme (‘opt out’) within the month-long ‘opt-out period’ that follows their enrolment.
Once they have enrolled eligible workers into a workplace scheme, employers must make a contribution to those workers’ pension savings. The minimum contribution levels for all automatic enrolment schemes are being phased in. Until the end of September 2017, the minimum contribution rate must total two per cent of the salary of each worker who is automatically enrolled, with at least one per cent provided by the employer.
Scope of the research
The research consisted of three strands:
Qualitative depth interviews with 50 employers, conducted with at least one person who had been involved in the implementation of automatic enrolment;
Quantitative administrative data provided by these employers, including details of any pension arrangements offered prior to automatic enrolment, and details of the numbers and types of workers who opted out after being automatically enrolled;
Qualitative depth interviews with 100 workers who had chosen to opt out of these employers’ schemes after being automatically enrolled.
The employers who took part in the research all had one of five staging dates between January and July 2014 and encompassed a range of sectors, including private and public. The workers who took part in the research were based at 42 of the 50 employers included in the study. They had all opted out within one month of being informed that they had been automatically enrolled.
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