- Government communications ‘not good enough’ say employers
- Many risk breaking the law because they don’t understand it
Just one in four of the business decision makers (24%) due to comply with auto enrolment this year feels they have had enough information from the Government to do so, new research reveals today.
Creative Auto Enrolment is urging the government to act now and communicate auto enrolment more effectively, having been approached by many businesses missing their staging dates who could now face fines. A quarter of employers (25%) say that they have received minimal communication from the government, while 24% say they’ve hardly heard anything about auto enrolment.
In fact, 5,000* businesses look set to unwittingly break the law by telling their employees to opt out of the pensions plans, simply because they do not understand auto enrolment. This practice of coercion is illegal and if found in breach of it, employers could face penalties and more serious consequences.
David White, Managing Director of Creative Auto Enrolment, said: “This is serious business. Companies face fines and legal investigations if they get auto enrolment wrong and The Pensions Regulator has threatened that employers need to do the right thing or it will “come after” them.
“However, everything we are hearing tells us that many are mishandling the process because they are ill-informed. It’s unfair to hand out penalties to companies that haven’t received adequate information and guidance in order to prepare for auto enrolment.
“Our research is clear, the Government’s communications aren’t getting through to those who need it most. It is good news that The Pensions Regulator is committing time and resource to the employers and advisers who need it most, but these figures suggest a nationwide issue which needs addressing fast.”
According to information sourced by Creative Auto Enrolment, the majority of communications from the Government is sent to businesses via email. The Direct Marketing Association reports a 25% overall email open rate but with unsolicited emails often ignored and auto enrolment communications heavily reliant on having accurate email addresses for every business in the UK, the information is potentially not getting to the right people. It’s evident that this form of communications simply isn’t good enough.
An overall lack of understanding by businesses is cited as their biggest barrier to complying (36%). This is followed by a lack of resources (30%) and time (25%). Over half (52%) of those surveyed estimate that preparing for their staging date has taken, or will take, over 10 weeks in terms of the man hours involved.
To find out more, please visit http://www.creativeautoenrolment.co.uk/.
*6% of those that own businesses of 50-250 employees. 84,250 UK businesses with 50-250 employees according to ONS UK Business: Activity, Size and Location – 2013. 6% of 84,250 = 5055
