One in five small businesses plan to contribute more than the minimum for auto enrolment
NOW: Pensions has revealed that almost one if five businesses are planning to contribute more than the required minimum amount when enrolling their employees into a workplace pension as part of auto enrolment.
In the recent survey of 450 SMEs, NOW: Pensions found that 8% were planning to pay more than the minimum contribution, with another 9% saying that they intend to pay the minimum initially, but plan to increase their contributions as time goes on.
When asked why they plan on paying more than the minimum contribution, 56% of businesses said they felt it would assist with recruitment and retention of employees. 43% said that they felt the minimum employer contribution was too low and 39% said that they hope that their employees will be encouraged to contribute more if they see their employer doing the same. Almost a quarter of those planning to contribute more said that they don’t currently offer any other employee benefits so are willing to pay more to contribute to a better pension for employees.
Morten Nilsson, CEO at NOW: Pensions commented on the findings: “The perception is that large firms offer better pension provision than their SME counterparts but this isn’t necessarily true. Smaller companies very often know their employees personally and have a more paternalistic attitude.
Auto enrolment is a legal obligation but many companies are waking up to the benefits of offering a more generous pension package. The reality is that a combined pension contribution of 8% isn’t going to be enough for most people to have a comfortable retirement. If employers contribute even a small amount more than they are obliged to do, this can make a big difference to employees’ final pension pots.”
Have you started preparing your business for auto enrolment yet? Visit the IRIS Auto Enrolment page to see the full range of auto enrolment solutions available and see how you could benefit.