HR auto-enrolment a challenge

compliance with auto-enrolment requirements is the biggest challenge relating to defined contribution (DC) pensions facing employers, according to research by Mercer, Employee Benefits reports.

The research, which analysed the DC pension offerings of more than 300 UK employers, showed that getting employees to understand pensions ranked as the second-biggest challenge, followed by managing the cost of auto-enrolment and having to redesign existing pension contributions structures.

According to Professional Pensions, the top concern was ensuring HR and payroll systems can comply with the requirements.

Mercer UK head of defined contribution Paul Macro said: “The new requirements are likely to hit many companies hard, both financially and in terms of HR resource spent on implementation and ongoing maintenance.”

Mercer's survey also found 69% of participating employers expected to enrol current non-members into existing plans and nearly two-thirds of companies were looking to change their contribution designs to allow for the increased overall cost.