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Over two thirds of firms concerned about pension auto-enrolment

By May 28, 2024No Comments

A new report has found that over two thirds of businesses are concerned about the introduction of pension auto-enrolment.

The research by Aon found that more than a quarter of respondents are worried about the increased costs of additional contributions.

A similar proportion have reservations about the impacts on existing contributions.

38% of participants said their organisation has not received sufficient clarity about the design and details of the scheme in advance of launch.

Auto-enrolment is due to be introduced by the Government in January and will see those workers who are not already members of an occupational pension scheme enrolled in one.

“It’s clear from the findings of Aon’s Pension Auto-Enrolment report that many businesses are concerned about the cost and complexity of the new system,” said Mairead O’Mahony, Head of Human Capital at Aon Ireland.

“As we move from design to implementation, it is important that we provide businesses with the necessary supports to navigate the significant change ahead and minimise the impact of the compliance burden and increased costs on businesses.”

The survey of 151 HR, finance and business leaders by Aon revealed that the introduction of the scheme will have some less considered implications.

More than 4 in 10 businesses said they plan to adjust future employee compensation levels to manage the increased costs created by the system.

While just under a third of surveyed firms said they plan to transfer costs directly to the consumer.

That figure rises to 40% among mid-sized businesses.

28% of organisations said they plan to lower other business costs to absorb the impact of the scheme.

The research also found that levels of awareness about auto-enrolment at 74% are reasonably high, with awareness highest among firms with over 250 employees.

On the other hand, awareness among mid-sized businesses was lower at 64%.

However, more than a third of organisations have yet to take any action in preparing for auto-enrolment.

“Our research reveals that most business leaders believe the system will help to create a fairer and more equitable pensions landscape in Ireland,” said Ms O’Mahony.

“However, the proposed system is not perfect, and additional measures should now be considered to further address the gender pensions gap.”

Article Source – Over two thirds of firms concerned about pension auto-enrolment – RTE

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