Employers awareness, understanding and activity relating to workplace pension reforms, Spring 2012

Transcription

1 Research Report Employers awareness, understanding and activity relating to workplace pension reforms, Prepared for: The Pensions Regulator and the Department for Work and Pensions

2 Employers awareness, understanding and activity relating to workplace pension reforms, Prepared for: The Pensions Regulator and the Department for Work and Pensions Prepared by: BMG Research July 2012 Produced by BMG Research Bostock Marketing Group Ltd, Project: 8364 Registered in England No Registered office: 7 Holt Court North Heneage Street West Aston Science Park Birmingham B7 4AX UK Tel: +44 (0) UK VAT Registration No Birmingham Chamber of Commerce Member No: B4626 Market Research Society Company Partner ESOMAR Member (The World Association of Research Professionals) British Quality Foundation Member Market Research Quality Standards Association ISO 9001/2000; The International quality mark for organisational excellence ISO 9001/2008; The provision of Market Research services which incorporates ISO 20252/2006 Investors in People Standard - Certificate No. WMQC 0614 Interviewer Quality Control Scheme (IQCS) Member Company Registered under the Data Protection Act - Registration No: Z The; Market Research Society Code of Conduct The BMG Research logo is a trade mark of Bostock Marketing Group Ltd

3 Executive summary Report contents This report consists of two chapters. The first chapter, which was commissioned by the Pensions Regulator, considers results relating to the Employers awareness, understanding and activity relating to workplace pension reforms, (pages 2 to 116). The second chapter, which was commissioned by the Department for Work and Pensions, considers results relating to the Extended Working Life tracker, (pages 117 to 144). 1

4 Employers awareness, understanding and activity relating to workplace pension reforms, Chapter One: Employers awareness, understanding and activity relating to workplace pension reforms, 2

5 Executive summary Table of Contents 1 Executive summary Introduction Key findings Background and method Background Objectives Survey methodology Research findings Awareness of automatic enrolment Understanding of automatic enrolment Source of awareness of changes Confidence in knowing the date when the changes apply How long employers expect the process to take Elements of automatic enrolment on which employers need more information Expectations of enforcement The Regulator Attitudes towards automatic enrolment Consultation on automatic enrolment Level of preparation for automatic enrolment Preparation for automatic enrolment undertaken and use of external advisors Tasks completed towards compliance with automatic enrolment Consideration of current scheme Intentions to consult with other parties Aspects for which employers will seek assistance from an external advisor Willingness to pay for services Services would be prepared to pay for Confidence in meeting deadline and perceived challenges in complying with automatic enrolment Appendix A: Profile of achieved and weighted sample Achieved sample profile Weighted sample profile Appendix B: Call outcomes

6 Employers awareness, understanding and activity relating to workplace pension reforms, 1 Executive summary 1.1 Introduction This research was carried out by BMG Research on behalf of The Pensions Regulator. It follows two previous waves conducted January to March 2011, and September The workplace pension reforms 2 are set out in the Pensions Act They will be introduced in stages with large employers being subject to the duties first from October Large employers will be subject to the duties between October 2012 and February 2014, medium employers from April 2014 to April 2015 and small/micro employers from June Under the reforms, employers will be required to automatically enrol certain members of their workforce, these are called eligible jobholders (those aged between 22 and State Pension age, working in the UK and earning more than 8,105 4 ), into a workplace pension scheme, unless the worker is already in a qualifying scheme. Eligible jobholders can, however, choose to opt out of pension scheme membership. Other members of the employer s workforce will be able to choose to join or opt in to a pension scheme, and, if they do, the employer will have to arrange membership for them into a workplace pension scheme. The type of pension scheme into which they must be enrolled will depend upon the status of the worker. Employers may choose to enrol eligible jobholders into their own pension scheme provided it meets or exceeds the minimum requirements set out in the reforms; to set up a new scheme which meets these requirements; to enrol workers in NEST (National Employment Savings Trust); or, to amend their existing pension arrangements to meet or exceed the minimum requirements set out in the reforms. As with the first and second waves, the research comprised a nationally representative telephone survey of private sector employers operating in the UK, with 751 interviews completed in Spring 2011, 614 in Autumn 2011 and 609 in. The wave also included 105 interviews with large public sector employers. This report summarises the results from the survey, considering the private and public sector combined, and drawing comparisons between large employers in the private and public sector. It also provides an overview of results for the private sector separately, considering differences by employer size, making reference to the findings from the previous two survey waves where relevant. 1 The reports of the previous waves can be found at 2 Also referred to as automatic enrolment in this report. 3 Large employers are those with 250 or more employees; medium: 50 to 249 employees; small: 5 to 49 employees; micro: 1 to 4 employees. 4 This amount is in 2012/13 terms and will be reviewed annually. 4

7 Executive summary Interviews were conducted via Computer Aided Telephone Interviews (CATI) with the main person responsible for making decisions about pension provision within the organisation. Spring 2011 interviews were conducted between January and March 2011, Autumn 2011 interviews during September 2011, and interviews during April and May Key findings Awareness of workplace pensions reform Over half (54%) of all employers were aware without prompting of forthcoming changes in pensions law. Spontaneous awareness of forthcoming changes has increased among private sector employers by ten percentage points since Autumn 2011 and by fifteen percentage points since Spring As was the case in the previous survey waves, awareness and knowledge of the changes to pensions law increased with size of employer. Unprompted awareness of changes in pension law ranged from 50% among (private sector) micro employers to 94% among large employers (both private and public sector). Once prompted, two in five (42%) of all employers said they were aware of the reforms, that is, they knew of the three key features of the reforms which together can provide an indicator of awareness 5. Among private sector employers only, awareness stood at 41%. Prompted awareness of the reforms stood at nine in ten (91%) of all large employers (93% of private sector and 84% of public sector), four in five (80%) medium (private sector) employers, two thirds (66%) of small (private sector) employers and a third (31%) of micro (private sector) employers. Compared to Autumn 2011, awareness levels increased among all private sector employers from 33% to 41%, and specifically among small (private sector) employers (from 47% to 66%). Among large, medium and micro employers results were largely unchanged. 5 The regulator classes employers as having awareness of the workplace pension reforms if they have sufficient knowledge to know what the main requirements and implications are for them when prompted, namely they know all of: employers will have to automatically enrol UK workers; employers will have to provide a pension scheme for automatic enrolment; and, employers will have to contribute to their employees pensions. 5

8 Employers awareness, understanding and activity relating to workplace pension reforms, Employer understanding of how to discharge their duties with respect to workplace pensions reform Using a composite indicator which, like the awareness indicator, draws on the principal features of the reforms that survey participants were asked about, the survey established that a quarter (26%) of all employers understood how to discharge their duties, that is, they knew of the five key features of the reforms which together provide an indicator of understanding 6. Consistent with the trend of awareness, understanding increased with employer size. Seven in ten (70%) of all large employers (71% of private sector and 65% of public sector) understood how to discharge their duties, while half (50%) of medium (private sector) employers understood how to discharge their duties, as did two fifths (43%) of small and a fifth (19%) of micro (private sector) employers. Understanding levels among large, small and micro (private sector) employers were higher than in Autumn 2011 (increasing by 14, 25 and 13 percentage points respectively), while among all private sector employers as a whole it has increased from 10% to 26%. Among all employers awareness was highest in relation to employers being required to contribute to their workers pension, with three in five (60%) aware of this. Around half of all employers were aware of the five other principal elements of the reform with the exception of the need to register with the appropriate government body, of which two in five (41%) were aware Attitudes towards automatic enrolment Three fifths of employers (58%) agreed that the introduction of automatic enrolment is a good idea for their employees and two thirds (64%) that their organisation would be able to deal with any additional administrative demands associated with it. The proportion of employers thinking the reforms are a good idea was broadly similar among large (including both private sector and public sector), medium and small employers but lower (55%) among micro employers. The level of support has remained similar to Autumn 2011 among all size groups except among (private sector) large employers, with 69% saying the reforms are a good idea, compared to 81% in Autumn Large public sector employers were less likely than large private sector employers to say they would be able to deal with any additional administrative demands involved in implementing automatic enrolment (73% compared to 82%). 6 The Regulator classes employers as understanding how to discharge their duties if they know enough about their legal requirement to proceed to plan for, and take action towards, compliance. Specifically, understanding is defined as an employer knowing all of the three elements of the awareness definition (as set above) plus knowing two additional features when prompted. Therefore an employer is classed as having understanding if they know all of the following: employers will have to automatically enrol UK workers; employers will have to provide a pension scheme for automatic enrolment; employers will have to contribute to their employees pensions; employers will have to register with the appropriate government body; and, employers will need to communicate to UK workers on an individual basis. 6

9 Executive summary Micro employers were the least likely size band to say that their organisation would be able to deal with any additional administrative demands involved in implementing automatic enrolment (60%, compared to 81% for large, 78% for medium (private sector) and 74% for small (private sector) employers). Half (48%) of all employers agreed that their organisation would leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment. Micro employers were most likely to say this (51%), with large employers least likely (9%) to do so Level of preparation for automatic enrolment A fifth (21%) of all employers reported having taken some action to prepare for the introduction of automatic enrolment. Around one in ten (13%) reported that planning had begun, one in twenty (5%) that plans had been drawn up, and 3% that plans had been fully implemented. Half (52%) reported that their organisation had not done anything yet to prepare for the introduction of automatic enrolment, as well as the quarter (24%) of all employers who were unaware of the changes. Large employers were the most likely to have taken action to prepare, with the extent of activity carried out decreasing with employer size. Four fifths (82%) of large employers (85% of private sector and 81% of public sector) reported having taken some action towards preparing for automatic enrolment, two thirds (65%) of medium (private sector) employers, a third (35%) of small (private sector) employers and around one in ten (14%) of micro (private sector) employers. Six per cent of all large employers (5% of private sector and 13% of public sector) reported that they had fully implemented their plans, a quarter (25%) that they had drawn up plans and begun to act upon them, around one in ten (11%) that they had drawn up plans but not yet taken any action, and two in five (40%) that they had begun planning. One in ten (10%) of medium (private sector) employers reported they had drawn up plans and started to act on them, while 2% of small and micro (private sector) employers said they had done so Action carried out to date Working out which pension scheme to use (72%), understanding their ongoing duties relating to automatic enrolment (67%) and engaging the relevant departments/organisations (64%) were the actions most likely to be reported as having been begun or completed among large employers. Large private sector employers were more likely than large public sector employers to report having begun or completed the following activities: working out which pension scheme to use (75% of large private employers had begun or complete compared to 57% of large public sector employers); engaging the relevant departments/external organisations (66% compared to 50% respectively); 7

10 Employers awareness, understanding and activity relating to workplace pension reforms, working out which parts will be carried out internally and which will be carried out by an external advisor (63% compared to 48% respectively); working out how much the pension contributions will cost (58% compared to 38% respectively); working out how much it will cost to implement the changes excluding the contribution costs (45% compared to 26% respectively). Medium (private sector) employers were most likely to have begun or completed choosing which pension scheme to use (41%) or working out which parts of the process will be conducted internally or externally (40%). Small (private sector) employers were most likely to have begun or completed identifying eligible workers 7 (27%) and working out a timetable (23%) Micro (private sector) employers were most likely to have begun or completed identifying eligible workers (11%) and engaging the relevant departments/ organisations (8%) Who employers have consulted with One in six (16%) of all employers said that they had consulted a third party about the introduction of automatic enrolment and almost all of these (13%) mentioned a professional intermediary, most commonly a pension provider (4%), an accountant (4%), an IFA (3%) or a pension consultant/ebc 8 (2%). Consulting another party was most common among large employers (67% had done so), and decreased by size of employer to 11% of micro (private sector) employers. Large public sector organisations were less likely than large private sector organisations to report having consulted (52% compared to 70%). Large employers were most likely to have consulted a pension consultant (22%), a pension provider (18%) or an IFA (12%). Medium (private sector) employers were most likely to have consulted an IFA (15%), a pensions consultant (12%) or a pension provider (9%). Small (private sector) employers had also most commonly consulted with an IFA (10%) or a pension provider (7%). Micro (private sector) employers had most commonly consulted with an accountant (5%) or a pension provider (3%) Likelihood of using external advisor in future The vast majority of employers said they would be likely to consult someone in the future with respect to automatic enrolment. The parties that employers reported they would most likely turn to were an accountant (65%), a pension provider (48%) and an IFA/broker (44%). Large and medium employers were more likely to say they would consult a pension provider (63% and 68% respectively) and a pension consultant/ebc (42% and 43% 7 By eligible workers we mean those workers who are either eligible to be automatically enrolled, i.e. eligible jobholders, non eligible jobholders or eligible workers as identified in TPR s detailed guidance ( 8 Employee Benefit Consultant 8

11 Executive summary respectively),while in contrast small and micro employers were more likely to say they would consult an accountant (58% and 69% respectively). Large private sector employers were more likely to say they would consult with a pension consultant/ebc (45% compared to 28% of large public sector employers) and an IFA (37% compared to 11%). In contrast, large public sector employers more likely to say they would consult with a pension administrator (60% compared to 32% of large private sector employers) and a trade or professional body (33% compared to 15%). Of the two fifths (79%) of employers (largely composed of micro and small employers) who had not started planning for automatic enrolment, the aspects they were most likely to say they would use an external advisor for included: reviewing whether their current scheme can be used for automatic enrolment (49% said they would certain or very likely to); finding out what they need to do to register with the appropriate government body (47%); choosing a pension scheme (44%) Willingness to paying for services Three in ten (28%) of all employers reported a willingness to pay a third party for services related to automatic enrolment (where applicable, in addition to what they already pay for such services). Almost a fifth (17%) said they would be prepared to pay but only if absolutely necessary, while 6% expressed a willingness to pay for all elements, and 5% for only some elements. Overall, a third (33%) of all large employers said that they would be prepared to pay a third party for additional services (36% of private sector and 13% of public sector). Findings for medium, small and micro (private sector) employers were consistent with Autumn 2011, with a quarter (25%) of medium (private sector) employers saying they would be prepared to pay for services, three in ten (30%) small (private sector) employers, and a quarter (27%) of micro (private sector) employers Confidence in meeting deadline and perceived challenges in complying with automatic enrolment After a simple overview of the reforms was explained to respondents, along with an approximate date when the reforms would apply to their organisation, close to nine in ten (86%) of all employers reported that they felt confident that their organisation would have done everything it needed to by the deadline set for it, including half (55%) who reported feeling very confident in this respect. Confidence in meeting the deadline was highest among large employers (98%), with 98% of large private sector employers saying this and 96% of large public sector employers. Confidence was at a similarly high level among medium (private sector) employers (96%) and slightly lower among small (89%) and micro (private sector) employers (85%). 9

12 Employers awareness, understanding and activity relating to workplace pension reforms, A third (33%) of employers mentioned the costs associated with automatic enrolment as being a challenge their organisation faced in complying. Among large employers the issue of greatest concern related to the administration involved in complying, with a third (30%) mentioning this (30% of private sector and 29% of public sector). Among medium, small and micro (private sector) employers, cost was the issue mentioned most (28%, 28% and 35% respectively) as a challenge. 10

13 Background and method 2 Background and method This research was carried out by BMG Research on behalf of The Pensions Regulator. It follows two previous waves conducted January to March 2011 and September Background The workplace pension reforms are set out in the Pensions Act They will be introduced in stages with large employers being subject to the duties first from October Large employers will be subject to the duties between October 2012 and February 2014, medium employers from April 2014 to April 2015 and small/micro employers from June Under the reforms, employers will be required to automatically enrol certain members of their workforce, these are called eligible jobholders (those aged between 22 and State Pension age, working in the UK and earning more than 8, ), into a workplace pension scheme, unless the worker is already in a qualifying scheme. Eligible jobholders can, however, choose to opt out of pension scheme membership. Other members of the employer s workforce will be able to choose to join or opt in to a pension scheme, and, if they do, the employer will have to arrange membership for them into a workplace pension scheme. The type of pension scheme into which they must be enrolled will depend upon the status of the worker. Under the reforms, employers will also be required to make a minimum contribution to defined contribution schemes for eligible jobholders who have been automatically enrolled. These minimum contribution levels will be phased in to allow employers to adjust to the costs of the reforms gradually. Once phasing is complete employers must make a contribution equivalent to at least three per cent of an eligible jobholder s gross qualifying earnings between 5,564 and 42, Total contributions for each eligible jobholder must be equivalent to at least eight per cent of qualifying earnings, with any non-employer component coming from the individual s contribution and normal tax relief. Qualifying earnings are made up of specific components of pay including wages, salary and bonuses. Employers may choose to enrol eligible jobholders into their own pension scheme provided it meets or exceeds the minimum requirements set out in the reforms; to set up a new scheme which meets these requirements; to enrol workers in the National Employment Savings Trust (NEST); or, to amend their existing pension arrangements to meet or exceed minimum requirements. Three bodies are jointly responsible for delivering the reforms: the Department for Work and Pensions (DWP), the Pensions Regulator (the Regulator), and NEST. DWP is responsible for coordinating activity for the reform programme, including 9 The reports of the previous waves can be found at 10 This amount is in 2012/13 terms and will be reviewed annually 11 This amount is in 2012/13 terms and will be reviewed annually 11

14 Employers awareness, understanding and activity relating to workplace pension reforms, agreeing policy with Ministers and overseeing delivery. The Pensions Regulator's role in these reforms is to maximise compliance with the employer duties set out in the Act, and ensure certain safeguards protecting workers are adhered to. The new regulatory responsibilities that the Regulator has assumed are known as the Employer Compliance Regime (ECR). NEST will be one of the qualifying schemes and will be open to any employer who wants to use it to meet their duties. NEST has a public service obligation which means it must accept all employers that apply to join it. The Regulator s risk-based approach to regulation will be extended to apply to this new area of business, which will fully reflect the requirements of Better regulation. The primary focus is educating and enabling employers to comply with the new regime The Regulator s Employer Compliance Communication Programme The Regulator s Employer Compliance Communication Programme aims to: Provide assistance to the industry and pension schemes by informing them of the requirements placed on them; Engage with key stakeholders who have an actual or potential interest in the Regulator s objectives, and who will act as gatekeepers to intermediaries (professional advisors) and employers; Utilise intermediaries (professional advisors) as a direct conduit to employers, and provide clear, accurate and fair information to this group for onward dissemination; Actively engage with employers ahead of the introduction of their new duties, to promote registration facilities and enable them to comply. 2.2 Objectives The overarching aims of the survey are: To monitor levels of awareness and understanding of the workplace pension reforms among employers; To inform the Employer Compliance Communication Programme, the aims of which are set out in section The specific objectives of the research are: To identify and track awareness, understanding, knowledge, attitudes and intended actions in relation to their role in 2012 pension reforms among employers; To determine sources of awareness of the reforms; To determine the extent of preparations employers have made for the reforms; To understand what information and support employers have sought regarding the reforms and from whom; To ascertain what plans, if any, employers have for getting support with automatic enrolment and whether they are prepared to pay for services; To identify any blockages in the employer journey from awareness to undertaking the appropriate action. 12

15 Background and method 2.3 Survey methodology Methodology and sample The survey was a telephone survey of employers operating in the UK, with 714 interviews conducted via Computer Aided Telephone Interviewing (CATI) in April and May Interviews were conducted with the main person responsible for making decisions about pension provision within the organisation. The sample comprised 609 private sector employers and 105 large public sector employers. The previous waves, conducted between January and March 2011 and during September 2011, comprised 751 interviews and 614 interviews respectively, all undertaken with private sector employers. Sample was drawn from Experian 12. The average interview length was 20 minutes Quotas and sample profile Private sector employers Within the private sector sample of the research, quotas were placed on employer size band, Standard Industrial Classification (SIC) within employer size band, and on region/country. Quotas were set from The Office for National Statistic s (ONS) Inter-Departmental Business Register (IDBR) 13 March 2011 statistics, but reflected the need to over-sample medium and large businesses relative to their prevalence in the population to allow for robust analysis by employer size band. Since a quota sampling approach rather than a random sampling approach was taken, a response rate for the survey cannot be calculated. Appendix B outlines the call outcomes, indicating the cooperation rate based on an estimation of whether the organisations contacted were in-scope for the survey. On this basis the cooperation rate was 30%. The number of private sector interviews achieved by employer size is shown in figure 1 overleaf for each of the three waves. 12 Experian is a database containing 1,935,050 business records, including the self-employed, captured from a number of sources including: Companies House data; Thomson Directories; and Yell Data. 13 The Inter-Departmental Business Register (IDBR) is a list of UK businesses maintained by the Office for National Statistics (ONS) and combines the former Central Statistical Office (CSO) VAT based business register and the former Employment Department (ED) employment statistics system. It provides a common framework for business registers for statistical purposes. 13

16 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 1: Number of interviews completed by wave Spring 2011 (January to March 2011) Autumn 2011 (September 2011) (April to May 2012) 1 to 4 employees (micro) to 49 employees (small) to 249 employees (medium) employees (large) Public sector employers Unlike the research undertaken in Spring 2011 and Autumn 2011, in an additional 105 interviews were also undertaken with large (250 or more employees) public sector employers. A full breakdown of the achieved sample can be found in Appendix A Weighting and presentation of data Throughout this report the results of the latest survey wave are presented including both private and public sector employers. Differences between large private and large public sector employers are also considered, as are changes over the three waves within the private sector at a total level, and by employer size band. It is important to note that, while interviews with employers with 250 or more employees account for 37% of the achieved sample overall, and 26% of interviews achieved within the private sector, they actually account for less than 1% of the UK business population. Similarly, while interviews with the public sector account for 40% of the achieved sample within the large employer size band, they actually account for 16% of UK businesses within this size band. Using March 2011 IDBR population estimates the data have been weighted by SIC within size, and by region/country, to reflect the actual breakdown of the UK private sector business population and large employers in the public sector, so that the views of micro employers account for 73% of the weighted total sample, and the views of large employers account for less than 1% etc. Within this, large public sector employers have been weighted to represent 16% of interviews with large employers, reflecting their prevalence within this size band. While all data shown in this report are weighted, unweighted sample bases are shown to indicate the reliability of the sub-sample sizes. A full breakdown of the weighted sample profile can be found in Appendix A. Results have been presented rounded to 0 decimal places, which may mean that in the reporting some percentages may not add up to exactly 100%. For example, if there are 48.5% answering agree and 51.5% answering disagree, these figures would be rounded up to 49% and 52%, totalling 101%. This explains the instances where summary text does not match a graph or table to which it is referring. 14

17 Background and method Results have also only been presented where base sizes are equal to, or more than, 30 respondents. Any questions or sub group analysis where responses are fewer than 30 have not been reported on Indicating statistically significant differences Charts and table have been used throughout this report to summarise the findings, and where statistically significant differences between sub-groups or over time occur these have been indicated by the use of the following symbol: S. Where differences are noted in this way, or in the text, (between sub-groups or over time) they are statistically significant at the 95% level of confidence. 15

18 Employers awareness, understanding and activity relating to workplace pension reforms, 3 Research findings 3.1 Awareness of automatic enrolment Unprompted awareness of automatic enrolment All employers were asked if they were aware of any changes in pension law that will apply to UK employers. Those who reported being aware of any changes to pension law were then asked without prompting if they could recall any of the changes or new requirements that will come into place as a result of the planned changes to pension law, and the figure below illustrates the responses to this question among all employers Unprompted awareness of automatic enrolment among all employers Overall, over half (54%) of all employers said that they were aware of changes in pension law that will apply to UK employers. When probed for specific elements of the changes the highest mentions were that employers have to offer a pension (12%), automatic enrolment (8%), that employers must contribute (8%) and that the changes are being phased in (7%). Figure 2: Unprompted awareness of automatic enrolment among all employers 50% 40% 30% 20% 12% 10% 0% Employers must offer pension 8% 8% Employers must contribute 7% 6% 5% 3% 3% 2% 2012 Workers can opt out Workers must contribute (714) 1% Q: Can you recall any of the changes or new requirements that will come into place because of the changes to pension law? Unweighted bases in parentheses. Mentions 1% or more. 14 Percentages shown have been rebased to include all respondents (i.e. not only those who said they were aware of a change in the laws) to facilitate comparisons over time and between sub-groups. 16

19 Research findings Unprompted awareness of automatic enrolment among all private sector employers over time Half (54%) of all private sector employers were spontaneously aware of changes, an increase of ten percentage points since Autumn 2011, and fifteen percentage points since Spring When asked what changes they were aware of, around one in ten (12%) mentioned without prompting that employers have to offer a pension, representing a decrease in the proportion mentioning this aspect of the reforms versus Autumn 2011 (down five percentage points). However, there were increases since Autumn 2011 in mentions of the more specific aspects of the reforms as follows: Automatic enrolment, mentioned by 8%, an increase of four percentage points; That the changes are being phased in, mentioned by 7%, an increase of four percentage points; That the changes are compulsory, mentioned by 4%, an increase of three percentage points; That the deadline is 2014, mentioned by 3%, an increase of two percentage points. Figure 3: Unprompted awareness of automatic enrolment among all private sector employers over time Q: Can you recall any of the changes or new requirements that will come into place because of the changes to pension law? Unweighted bases in parentheses. Mentions 1% or more Unprompted awareness of automatic enrolment among all large employers Nine in ten (94%) large employers reported being aware of the changes, and this was consistent across both the public (94%) and the private sector (94%), amongst whom the response was also in line with Autumn 2011, (91%), and Spring 2011 (89%). 17

20 Employers awareness, understanding and activity relating to workplace pension reforms, When asked what changes they were aware of, four in five (80%) of all large employers mentioned without prompting automatic enrolment, a quarter (28%) that the changes are being phased in, and around one in ten that employers must offer a pension (13%), that employers must contribute to their workers pensions (8%) and that the changes are happening in 2012 (7%). Considering the response among large private sector employers since Autumn 2011, there has been a large increase in the proportion mentioning automatic enrolment on an unprompted basis (82% compared to 54% in Autumn 2011), and the fact that the changes are being phased in (32% compared to 9%). There have also been increases in the proportions mentioning 2014 as a deadline, up four percentage points to 5%. As a consequence of increased mentions of the elements outlined above, there have been decreases on some of the other elements that employers must offer a pension scheme (a decrease of nine percentage points to 15%), 2012 as a deadline (a decrease of seven percentage points to 7%) and that workers can opt out (a decrease of nine percentage points to 6%). While seven in ten (71%) large public sector employers mentioned automatic enrolment, this was at lower levels than large private sector employers (82%). This was also the case in relation to employers needing to offer a pension (4% compared to 15%), that the changes are being phased in (6% compared to 32%), and the 2013 (2% compared to 6%) and 2014 (1% compared to 5%) as deadlines. Figure 4: Unprompted awareness of automatic enrolment among all large employers, large private sector employers over time and large public sector employers Q: Can you recall any of the changes or new requirements that will come into place because of the changes to pension law? Unweighted bases in parentheses. Mentions 1% or more. 18

21 Research findings Unprompted awareness of automatic enrolment among all medium private sector employers Four in five (83%) medium private sector employers reported being spontaneously aware of the changes, in line with the results found in Autumn 2011 (88%). While there has been a decrease in the proportion mentioning the fact that employers must offer a pension scheme to workers (from 26% in Autumn 2011 to 17% in ), there has been an increase of fifteen percentage points since Autumn 2011 in the proportion who mentioned automatic enrolment (to 42%), and an increase of fourteen percentage points in the proportion who mentioned the fact that the changes are being phased in (to 28%), and an increase of eight percentage points that the changes are compulsory (to 11%) Unprompted awareness of automatic enrolment among all small private sector employers Three in five (61%) small private sector employers reported being spontaneously aware of the changes, in line with the results found in Autumn 2011 (64%). Response with regard to the changes mentioned was very similar to Autumn 2011, with the only exception being an increase in the proportion mentioning automatic enrolment (up eight percentage points to 14%). Other elements mentioned by this group included that employers must offer a pension (16%), that employers must contribute to their workers pension (14%) and that the changes are being phased in (10%) Unprompted awareness of automatic enrolment among all micro private sector employers Half (50%) of micro private sector employers reported being spontaneously aware of the changes, an increase of fourteen percentage points since Autumn Spontaneous responses remain very similar to that found in Autumn 2011, with the fact that employers must offer a pension mentioned by 11% of this group, and around one in twenty mentioning automatic enrolment (4%), that the changes are being phased in (5%), that employers must contribute (6%), the 2012 deadline (6%), that workers can opt out (3%), and that it is compulsory (4%). 19

22 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 5: Unprompted awareness of automatic enrolment among medium, small and micro private sector employers over time Q: Can you recall any of the changes or new requirements that will come into place because of the changes to pension law? Unweighted bases in parentheses. Mentions 1% or more Prompted awareness of elements of automatic enrolment After determining whether they recalled the workplace pension reforms without any prompting, respondents were read out six features of the reforms and asked if they knew of these: Employers will have to automatically enrol UK workers; Employers will have to provide a pension scheme for automatic enrolment; Employers will have to contribute to their workers pensions; Employers will have to register with the appropriate government body; Employers will need to communicate with UK workers on an individual basis; Eligible workers 15 will need to be identified. 15 By eligible workers we mean those workers who are either eligible to be automatically enrolled, i.e. eligible jobholders (as identified in TPR s detailed guidance non eligible jobholders or eligible workers. 20

23 Research findings Prompted awareness of elements of automatic enrolment among all employers The figure below shows the proportion of all employers who were aware of each of the elements of the reforms on a prompted basis. They were told that the government is introducing changes to pensions law that apply to all businesses and charities, and were asked which of a number of changes to pensions law they were aware of. Among all employers awareness was highest in relation to employers having to contribute to their workers pension, with three in five (60%) aware of this. Around half of all employers were aware of the other elements of the reform with the exception of the need to register with the appropriate government body, of which two in five (41%) were aware. Figure 6: Prompted awareness of elements of automatic enrolment among all employers 100% 80% 60% 52% 55% 60% 53% 53% 40% 41% 20% 0% Automatic enrolment Must offer pension Employers must contribute (714) Need to register Must communicate Eligible workers identified Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses Prompted awareness of elements of automatic enrolment among all private sector employers There have been increases across all elements among private sector employers since Autumn 2011, with over half now aware that employers will have to automatically enrol all UK workers (up seven percentage points to 52%), that employers will have to provide a pension scheme for automatic enrolment (up twelve percentage points to 54%) 16, that employers will have to contribute to their workers pension (up seven percentage points to 59%) and that employers will need 16 In Spring 2011 the statement was employers will have to offer a qualifying pension scheme to employees. 21

24 Employers awareness, understanding and activity relating to workplace pension reforms, to communicate with their workers on an individual basis (up fourteen percentage points to 52%), a statement that was added at Autumn 2011 of the survey. A similar proportion was aware that eligible workers will need to be identified (53%), a statement that was added to the survey at the latest wave of research. Levels of awareness of the need to register with the appropriate government body have also increased since Autumn 2011 (up eighteen percentage points to 41%), although this remains the element that achieves the lowest levels of awareness. Figure 7: Prompted awareness of elements of automatic enrolment among all private sector employers over time Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses Prompted awareness of elements of automatic enrolment among large employers The vast majority of large employers (a minimum of 90%) were aware of each element of the reforms except in relation to the need to register, with the appropriate government body (76%). Responses have largely remained unchanged over time, with a minimum of nine in ten aware that employers will have to automatically enrol all UK workers (96%), that employers will have to provide a pension scheme for automatic enrolment (96%) 17, that employers will have to contribute to their workers pension (96%), that employers will need to communicate with their workers on an individual basis (90%), and that eligible workers will need to be identified (90%). 17 In Spring 2011 the statement was employers will have to offer a qualifying pension scheme to employees. 22

25 Research findings Prompted awareness of the need to register with the appropriate government body remains the element which achieves the lowest levels of awareness (77%). Large public sector employers have similar levels of awareness as large private sector employers, as evident in Figure 8. Figure 8: Prompted awareness of elements of automatic enrolment among all large employers, large private sector employers over time and large public sector employers Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses Prompted awareness of elements of automatic enrolment among medium private sector employers At lower levels than large private sector employers, levels of prompted awareness of each of the elements of workplace pension reforms have remained stable among medium private sector employers. A minimum of 78% of this group were aware of each of the individual elements with the exception of registering with the appropriate government body, where six in ten (59%) were aware Prompted awareness of elements of automatic enrolment among small private sector employers Among small private sector employers there were increases in prompted awareness of the need for employers to offer a pension (up fourteen percentage points to 74% to match Spring 2011 levels) and the need to communicate to UK 23

26 Employers awareness, understanding and activity relating to workplace pension reforms, workers on an individual basis (up thirteen percentage points to 66%). There were also increases in awareness of the need to register with the appropriate government body (up twenty-five percentage points to 55%), although this remains the element which achieves the lowest levels of awareness Prompted awareness of elements of automatic enrolment among micro private sector employers Among micro private sector employers prompted awareness remains highest in relation to employers having to contribute (53%). There were increases among this group in relation to the need to communicate with workers on an individual basis (up fourteen percentage points to 46%), and in relation to registering with the appropriate government body (up sixteen percentage points to 36%), although this remains the element which achieves the lowest levels of awareness, as is the case for all employer sizes. Figure 9: Prompted awareness of elements of automatic enrolment among medium, small and micro private sector employers over time Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses 24

27 Research findings Awareness of three key elements of automatic enrolment In order for employers to be able to comply with their duties, employers need to be aware of how to discharge their duties. The Regulator classes employers as having awareness of the workplace pension reforms if they have sufficient knowledge to know what the main requirements and implications are for them when prompted, namely they know all of: employers will have to automatically enrol UK workers; employers will have to provide a pension scheme for automatic enrolment; and, employers will have to contribute to their employees pensions Awareness of three key elements of automatic enrolment among all employers According to the awareness indicator set out above, overall, two in five (42%) of all employers were aware of the reforms, i.e. were aware of the need for employers to automatically enrol UK workers, to provide a pension scheme for automatic enrolment; and to contribute to their employees pensions Awareness of three key elements of automatic enrolment among all private sector employers Considering private sector employers separately, two in five (41%) were aware of the reforms, which represents an increase of eight percentage points since Autumn Awareness of three key elements of automatic enrolment among large employers Nine in ten (91%) large employers across the private and public sector were aware of the reforms, with results higher among private sector employers than public sector employers (93% and 84% respectively) Awareness of three key elements of automatic enrolment among medium private sector employers Four fifths (80%) of medium employers were aware of the reforms which is identical to the awareness levels in Autumn Awareness of three key elements of automatic enrolment among small private sector employers Two thirds (66%) of small employers had awareness of the coming reforms, a higher level that the 47% in Autumn Awareness of three key elements of automatic enrolment among micro private sector employers Among micro employers one third (31%) were aware of the changes, which is not statistically different to the 25% aware in Autumn 2011 or 29% in Spring

28 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 10: Awareness of three key elements of automatic enrolment among all private sector employers, medium, small and micro private sector employers over time Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses Awareness of three key elements of automatic enrolment among all employers by geography The figure below considers how this varied by geography among all private and public sector employers, and indicates that overall awareness was lowest in Scotland (26%), where 90% of the employers interviewed were micro private sector employers (compared to 54% of those in Wales and 70% of those in England). Figure 11: Awareness of three key elements of automatic enrolment among all employers by geography 18 Wales (32) 61% Scotland (57) 26% North England (NE,NW,Y&H) (137) 46% Midlands (EM,WM,E) (172) 32% South England (London,SE,SW) (302) 48% Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses 18 Data for Northern Ireland not shown due to low base size. 26

29 Research findings Awareness of three key elements of automatic enrolment among all employers by standard industrial classification The figure below considers how this varied by standard industrial classification among all private and public sector employers for those industries where bases sizes exceeded 30 responses. This indicates that overall awareness was highest among employers in the public administration (80%) and education (87%) sectors. Other than this, levels of overall awareness and understanding were relatively consistent by industry sector. Figure 12: Awareness of three key elements of workplace pension reforms among all employers by standard industrial classification Production (89) 49% Construction (47) 32% Wholesale and retail; repair of motor vehicles (89) 51% Accommodation & food services (35) 36% Professional, scientific & technical (75) 53% Business administration and support services (47) 38% Public admin (68) Education (33) 80% 87% Health (92) Arts, entertainment, recreation and other services (32) 37% 41% Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses 3.2 Understanding of automatic enrolment In order for employers to be able to comply with their duties, as well as being aware of how to discharge their duties, (i.e. employers will have to automatically enrol UK workers; employers will have to provide a pension scheme for automatic enrolment; and employers will have to contribute to their employees pensions), employers also need to be understand how to do so. The Regulator classes employers as understanding how to discharge their duties if they know enough about their legal requirement to proceed to planning for, and taking action towards, compliance. Specifically, we define understanding as knowing about of all five key elements of automatic enrolment. This includes 27

30 Employers awareness, understanding and activity relating to workplace pension reforms, knowing about all three elements that make up the awareness definition (as set out in section 3.1.3) as well as knowing about two additional features when prompted. Therefore an employer is classed as having understanding if they know all of the following: employers will have to automatically enrol UK workers; employers will have to provide a pension scheme for automatic enrolment; employers will have to contribute to their employees pensions; employers will have to register with the appropriate government body; and, employers will need to communicate to UK workers on an individual basis Understanding of all five key elements of automatic enrolment among all employers Using this indicator of employer understanding, a quarter (26%) of all employers understood how to discharge their duties, i.e. were also aware of the need to register with the appropriate government body and to communicate to UK workers on an individual basis Understanding of all five key elements of automatic enrolment among all private sector employers Among private sector employers separately, overall understanding increased by sixteen percentage points to 26% Understanding of all five key elements of automatic enrolment among large employers Differences between the private and public sector were less marked with regard to overall understanding (71% and 65% respectively) than they were with regard to awareness, yielding an overall level of understanding across all large employers of seven in ten (70%). Understanding has increased from 57% to 71% among large private sector employers since Autumn Understanding of all five key elements of automatic enrolment among medium private sector employers How to discharge their duties related to the reforms was understood by half (50%) of medium employers, similar to the levels in Autumn 2011 (45%) Understanding of all five key elements of automatic enrolment among small private sector employers Two fifths (43%) of small employers understood the reforms, which represents a significant increase from the Autumn 2011 level of 18% Understanding of all five key elements of automatic enrolment among micro private sector employers The reforms were understood by a fifth (19%) of micro employers which is also a higher level than in Autumn 2011 when it was 6%. 28

31 Research findings Figure 13: Understanding of all five key elements of automatic enrolment among medium, small and micro private sector employers over time Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses Understanding of all five key elements of automatic enrolment among all employers by geography The figure below considers how this varied by geography among all private and public sector employers, and indicates that overall understanding was lowest in Scotland (9% respectively). Figure 14: Understanding of all five key elements of automatic enrolment among all employers by geography 19 Wales (32) 40% Scotland (57) 9% North England (NE,NW,Y&H) (137) 31% Midlands (EM,WM,E) (172) 24% South England (London,SE,SW) (302) 27% Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses 19 Data for Northern Ireland not shown due to low base size. 29

32 Employers awareness, understanding and activity relating to workplace pension reforms, Understanding of all five key elements of automatic enrolment among all employers by standard industrial classification The figure below considers how this varied by standard industrial classification among all private and public sector employers for those industries where bases sizes exceeded 30 responses. This indicates that overall understanding was highest among employers in the public administration sector (64%). Other than this, levels of overall understanding were relatively consistent by industry sector. Figure 15: Understanding of all five key elements of workplace pension reforms among all employers by standard industrial classification Production (89) Construction (47) Wholesale and retail; repair of motor vehicles (89) Accommodation & food services (35) Professional, scientific & technical (75) Business administration and support services (47) Public admin (68) Education (33) Health (92) Arts, entertainment, recreation and other services (32) 28% 24% 29% 27% 27% 28% 35% 23% 28% 64% Q: The government is introducing changes to pensions law that apply to all businesses and charities. Which of the following changes in pensions law are you aware of? Unweighted bases in parentheses 3.3 Source of awareness of changes All employers who were aware of any changes in pensions law were asked where they heard about the changes. The figure below illustrates the responses to this question among all employers Source of awareness of changes among all employers Among all employers, the media (32%) was mentioned most often as the source of awareness of the changes. Around one in ten mentioned a professional advisor (12%), website content (11%) and word of mouth (7%). Two per cent mentioned SAGE (Sage provides business software, services and support to small and medium sized businesses). 20 Percentages shown have been rebased to include all respondents (i.e. not only those who said they were aware of a change in the law) to facilitate comparisons over time and between sub-groups. 30

33 Research findings Figure 16: Source of awareness of changes among all employers 50% 40% 30% 32% 20% 12% 11% 10% 7% 6% 6% 4% 4% 3% 3% 2% 2% 0% Media coverage Professional advisor Website content Word of mouth s Trade /professional body Leaflets or Booklets (714) Pension provider Professional/trade magazine Internally HMRC SAGE Q: Where have you heard about these changes in pensions law? Unweighted base in parentheses. Mentions 2% or more Source of awareness of changes among all private sector employers Among all private sector employers, the media (31%) continues to be mentioned most often as the source of awareness of the changes, as found in both Spring and Autumn Around one in ten (12%) of all private sector employers mentioned a professional advisor as the source of awareness of the changes, an increase of five percentage points since Autumn A similar proportion (11%) mentioned website content, again an increase of five percentage points since Autumn

34 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 17: Source of awareness of changes among all private sector employers over time Q: Where have you heard about these changes in pensions law? Unweighted base in parentheses. Mentions 2% or more Source of awareness of changes among large employers Large employers were most likely to mention media coverage (35%) and professional advisors (34%) as the source of their awareness of the changes, followed by website content (24%), pension providers (21%) and trade/professional bodies (19%). Among large private sector employers this pattern was very similar, although they were more likely to mention website content (24%) and trade/professional bodies (20%) than was the case in Autumn 2011 (15% and 8% respectively). While media coverage was also mentioned most frequently by large public sector employers (40%), the second most frequent response for this group was internally/from a colleague (26%) which was mentioned at higher levels than large private sector employers (11%), as was a government body (12% compared to 3%). In contrast, professional advisers were mentioned at lower levels among large public sector employers (14% compared to 38% of large private sector employers). Across both large private and large public sector employers one in ten (7%) mentioned the Regulator as the source of their awareness, which represented an increase of five percentage points among large private sector employers. 32

35 Research findings Figure 18: Source of awareness of changes among all large employers, large private sector employers over time, and large public sector employers Q: Where have you heard about these changes in pensions law? Unweighted base in parentheses. Mentions 2% or more Source of awareness of changes among medium private sector employers Response with respect to where medium private sector employers heard about the changes was very similar to that found in Autumn 2011, with the main sources reported as being media coverage (27%), professional advisors (23%) and pension providers (20%). There has been an increase in mentions of trade/professional bodies (up eight percentage points to 12%) and professional/trade magazines (up seven percentage points to 12%) among this group Source of awareness of changes among small private sector employers Small private sector employers continued to have heard about the changes via media coverage (34%), professional advisors (23%, an increase of ten percentage points since Autumn 2011) and website content (16%) Source of awareness of changes among micro private sector employers The main source of information reported by micro employers continued to be media coverage (31%). Other sources continued to be mentioned by less than 10% of micro private sector employers. 33

36 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 19: Source of awareness of changes among medium, small and micro private sector employers over time Q: Where have you heard about these changes in pensions law? Unweighted base in parentheses. Mentions 3% or more. 3.4 Confidence in knowing the date when the changes apply Employers were asked how confident they are that they know the date the changes in pension law will apply to their organisation 21. Those that expressed a degree of confidence were then asked when they thought the pensions law would apply to their organisation Confidence in knowing the date when the changes apply among all employers Overall one in three (33%) of all employers expressed confidence in this respect, including around one in ten (11%) who felt very confident, while a quarter (25%) were not at all confident. Overall, two thirds (65%) of all employers were either unaware of the changes, or not confident that they knew when the changes would apply to their organisation. 21. Where we refer to the date the changes apply to an employer we are referring to the date the employer duties first apply i.e. the employer's staging date. The inducement and prohibited recruitment safeguards under the Pensions Act 08 apply to all employers from 1 July At the time the research was undertaken the final staging dates for small and micro employers had not been published by Government. 34

37 Research findings The most commonly mentioned time period was between October 2012 and February 2014, mentioned by one in five (18%) of all employers. Despite the first staging date not being until October 2012, two per cent of all employers incorrectly believed that the reforms already applied. Figure 20: Suggested date when the changes apply among all employers Already applies 2% October 2012 to February % March 2014 April 2014 to April 2015 May 2015 June 2015 to April 2017 Later than April 2017 Never Don t know/unaware of changes/not 2% 7% 4% 6% 1% 1% (714) 63% Q: When do you think the pensions law will apply to your organisation? Unweighted bases in parentheses. NB. Multi-coding possible Confidence in knowing the date when the changes apply among all private sector employers There has been an increase in the proportion of private sector employers who rated themselves as confident (up fourteen percentage points to 33%) in knowing the date when the changes apply, and a corresponding decrease in the proportion who rated themselves as not confident, from 47% at Autumn 2011 to 41% in Spring 2012, as well as a decrease (from 33% to 24%) in the proportion who were unaware of the changes. 35

38 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 21: Confidence in knowing the date when the changes apply among all private sector employers over time Q: How confident are you that you know the date the changes in pensions law will apply to your organisation? Unweighted bases in parentheses Reflecting the results outlined above in relation to all employers, overall two thirds (65%) of all private sector employers were either unaware of the changes, or not confident that they knew when the changes would apply to their organisation. Once again, the most commonly mentioned time period was between October 2012 and February 2014, mentioned by one in five (18%) of all private sector employers Confidence in knowing the date when the changes apply among large employers Three quarters (78%) of large employers expressed a level of confidence in knowing the date when the changes will apply to their organisation. Following an increase in confidence from Spring 2011 to Autumn 2011 (from 68% to 81%), large private sector employers have remained equally confident in Spring 2012 (78%) that they know the date when the changes will apply to their organisation. One in five (21%) rated themselves as not confident in this respect, which is in line with results in Autumn 2011 (16%), following a decline from Spring 2011 to Autumn 2011 (from 30% to 16%). Large public sector employers were as confident as large private sector employers that they know the date when the changes will apply to their organisation (76%). 22 The response options for this question were changed at precluding comparisons with previous waves. 36

39 Research findings Figure 22: Confidence in knowing the date when the changes apply among all large employers, large private sector employers over time and large public sector employers Q: How confident are you that you know the date the changes in pensions law will apply to your organisation? Unweighted bases in parentheses Seven in ten (69%) large employers believed the changes will apply to their organisation between October 2012 and February 2014 (which is when the reforms will apply to them), and three in ten (31%) that they will apply later than this. Both large private and large public sector employers were most likely to believe the changes will apply to their organisation between October 2012 and February 2014 (70% and 60% respectively). However, large public sector employers were more likely than large private sector to believe the changes already apply (9% compared to 1%), while large private sector employers were more likely than large public sector employers to believe the changes will apply from March 2014 onwards (36% compared to 8%). 37

40 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 23: Suggested date when the changes apply among all large employers, large private sector employers and large public sector employers Q: When do you think the pensions law will apply to your organisation? Unweighted bases in parentheses. NB. Multi-coding possible Confidence in knowing the date when the changes apply among medium, small and micro private sector employers As was the case with large private sector employers, the proportion of medium, small and micro private sector employers who expressed a level of confidence (either very or fairly confident) in knowing when the changes apply to their organisation has increased since Autumn Confidence in knowing the date when the changes apply among medium private sector employers Medium private sector employers are more confident that they know when the changes apply to their organisation (up ten percentage points to 69%) than in Autumn They were most likely to believe that the changes will apply to their organisation between October 2012 and February 2014 (34%). Their staging date will in fact fall between April 2014 and April 2015 which a quarter (26%) of this group knew (see figure 24 below) Confidence in knowing the date when the changes apply among small private sector employers Small private sector employers are also more confident about know when the changes apply to their organisation (an increase of twelve percentage points to 48%), again balanced by a corresponding decline in the proportion who reported 38

41 Research findings not feeling confident in this respect. This group were also most likely to believe the changes will apply to their organisation between October 2012 and February 2014 (26%), although a similar proportion (28%) did mention a later date than this. Their staging date will in fact fall between June 2015 and April 2017 which one in ten (10%) of this group knew Confidence in knowing the date when the changes apply among micro private sector employers Among micro employers overall confidence, which has increased by thirteen percentage points since Autumn 2011 to 26%, was driven by an increased proportion who were aware of the changes, rather than by a corresponding decline in the proportion who reported not feeling confident. This group were also most likely to believe the changes will apply to their organisation between October 2012 and February 2014 (15%). Their staging date will in fact fall after May 2015 which 6% of these employers knew. Figure 24: Confidence in knowing the date the changes apply among medium, small and micro private sector employers over time Q: How confident are you that you know the date the changes in pensions law will apply to your organisation? Unweighted bases in parentheses 39

42 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 25: Suggested date when the changes apply among medium, small and micro private sector employers Q: When do you think the pensions law will apply to your organisation? Unweighted bases in parentheses. NB. Multi-coding possible. NB. Multi-coding possible 3.5 How long employers expect the process to take All employers were asked how long they think the process will take from starting to look for a pension scheme through to registering with the appropriate government body How long employers expect the process to take among all employers Three in ten (30%) of all employers did not know how long the process would take. Two in five (43%) believed it would take up to three months, a quarter (24%) four months to a year, and one in twenty (3%) believed it would take longer than a year. 23 This question was added at Autumn

43 Research findings Figure 26: How long employers expect the process to take among all employers 50% 43% 40% 30% 20% 24% 30% 10% 0% Less than three months Four months to a year More than a year Don't know 3% (714) Q: How long do you think the process will take from starting to look for a pension scheme through to registering with the appropriate government body? Unweighted base in parentheses How long employers expect the process to take among all private sector employers There has been a decrease since Autumn 2011 in the proportion of all private sector employers who did not know how long the process would take, from 42% to 30%, and an increase in the proportions who thought it would take up to three months (from 36% to 43%) and who thought it would take four months to a year (from 18% to 24%). One in twenty (3%) thought it would take longer than a year, in line with findings in Autumn 2011 (4%) How long employers expect the process to take among large employers Overall three in ten (29%) large employers did not know how long the process would take, although this figure was higher among large public sector employers (45%) than large private sector employers (26%), among whom there has been a decrease in this respect since Autumn 2011 (37% don t know). A quarter (28%) of all large employers believed the process would take less than three months, a third (32%) that it would take four months to a year, and around one in ten (11%) that it would take over a year, including one in twenty (4%) who believed it would take over eighteen months. While the proportion who expected the process would take less than three months was consistent across both private (27%) and public (34%) large sector employers, this masked the fact that 20% of large public sector employers believed it would take one to two weeks, compared to 3% of large private sector employers. Correspondingly, while a third (36%) of large private sector employers believed it would take between four months and a year, this fell to 15% of large public sector employers. Around one in twenty (6%) large public sector employers believed the process would take over a year. 41

44 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 27: How long employers expect the process to take among all large employers, large private sector employers over time and large public sector employers Q: How long do you think the process will take from starting to look for a pension scheme through to registering with the appropriate government body? Unweighted bases in parentheses How long employers expect the process to take among medium private sector employers A quarter (27%) of medium private sector employers did not know how long the process would take, a third (36%) of this group believed the process would take up to three months, a third (33%) that it would take between four months and a year, and one in twenty (4%) that it would take more than a year. Results were in line with those found in Autumn How long employers expect the process to take among small private sector employers A fifth (22%) of medium private sector employers did not know how long the process would take, two fifths (42%) of this group believed the process would take up to three months, three in ten (30%) that it would take between four months and a year, and one in twenty (5%) that it would take more than a year. Again results were in line with those found in Autumn

45 Research findings How long employers expect the process to take among micro private sector employers A third (33%) of micro private sector employers did not know how long the process would take, a decrease of thirteen percentage points since Autumn Two in five (43%) of this group believed the process would take up to three months, one in five (22%) that it would take between four months and a year, and two per cent that the process would take longer than a year. Again, results were in line with those at Autumn Figure 28: How long employers expect the process to take among medium, small and micro private sector employers over time Q: How long do you think the process will take from starting to look for a pension scheme through to registering with the appropriate government body? Unweighted bases in parentheses 43

46 Employers awareness, understanding and activity relating to workplace pension reforms, 3.6 Elements of automatic enrolment on which employers need more information Employers were asked which elements of automatic enrolment they felt they needed more information about Elements of automatic enrolment on which employers need more information among all employers As well as the quarter (24%) of all employers who were unaware of the changes, a further half (49%) of all employers said they needed further information, with a third (35%) saying they needed further information on all elements. In terms of more detailed elements, one in twenty (5%) felt they needed information on when the changes will apply to their organisation, and a similar proportion (3%) what the legislation means. Figure 29: Elements of automatic enrolment on which need more information among all employers ANY All elements When it applies What the legislation means Which scheme/provider might be right How much it will cost (no detail) How much the contributions will cost How to identify who is eligible Whether your existing scheme complies How to set up and manage the process How to register How it affects temporary / casual workers The benefits to the workers Not aware of changes 5% 3% 2% 1% 1% 1% 1% 1% 1% 1% 1% 24% 35% 49% (714) Q: Which elements of automatic enrolment do you feel you need more information about? Unweighted base in parentheses. Mentions 1% or more Elements of automatic enrolment on which employers need more information among all private sector employers As well as the quarter (24%) of all private sector employers who were unaware of the changes, a further half (49%) said they needed further information, with a third (35%) saying they needed further information about all elements, an increase of six percentage points since Autumn This question was added at Autumn

47 Research findings Figure 30: Elements of automatic enrolment on which need more information among all private sector employers over time Q: Which elements of automatic enrolment do you feel you need more information about? Unweighted bases in parentheses. Mentions 1% or more Elements of automatic enrolment on which employers need more information among large employers Overall half (55%) of all large employers said they needed further information, including one in seven (14%) who felt they needed more information about all elements, one in ten who wanted information on how to register (9%), or handling opt-outs (7%), and one in twenty wanting information on how to identify eligible workers (6%), how to communicate the changes (6%), when it applies (5%), how much the contributions will cost (5%) and what the legislation means (4%). Among large private sector employers the pattern of response reflects that outlined above, although there has been an increase in the proportion who felt they needed more information on how to register (from 1% in Autumn 2011 to 10% in Spring 2012), and how to communicate the changes (from 1% in Autumn 2011 to 7% in ), and a decrease in the proportion who wanted more information on when it applies (from 13% in Autumn 2011 to 5% in ). Large public sector employers were less likely than large private sector employers to want more information on how to register (1% compared to 10%), and more likely to want information on how to identify eligible workers (19% compared to 3%), how much it will cost generally and how much it will cost to implement specifically (4% and 3% respectively compared to 0% in both instances). 45

48 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 31: Elements of automatic enrolment on which need more information among all large employers, large private sector employers over time and large public sector employers Q: Which elements of automatic enrolment do you feel you need more information about? Unweighted bases in parentheses. Mentions 1% or more Elements of automatic enrolment on which employers need more information among medium, small and micro private sector employers The pattern of response for medium, small and micro private sector employers was very much in line with those found in Autumn Elements of automatic enrolment on which employers need more information among medium private sector employers Among medium private sector employers over half (55%) said that they needed more information on the topic, including a fifth (21%) who said they needed more information about all elements. Around one in ten said they needed information on when the changes apply to their organisation (12%), and on which scheme/provider might be right (8%, an increase of seven percentage points on Autumn 2011). They were less likely to mention needing information on how to identify eligible workers than in Autumn 2011 (4% compared to 10%) Elements of automatic enrolment on which employers need more information among small private sector employers Among small private sector employers, as well as the around one in ten (13%) who were unaware of the changes, half (50%) said that they needed more information on the topic, including three in ten (30%) who said they needed more information 46

49 Research findings about all elements. One in twenty said they needed information on when the changes apply to their organisation (6%), what the legislation means (5%) and how to register (4%) Elements of automatic enrolment on which employers need more information among micro private sector employers Among micro private sector employers, as well as the three in ten (29%) who were unaware of the changes, half (48%) said that they needed more information on the topic, including two in five (38%) who said they needed more information about all elements. Specific elements of the changes were mentioned at low levels. Figure 32: Elements of automatic enrolment on which need more information among medium, small and micro private sector employers over time Q: Which elements of automatic enrolment do you feel you need more information about? Unweighted bases in parentheses. Mentions 1% or more. 3.7 Expectations of enforcement All employers were asked what enforcement action they believed would be taken against an organisation that does not comply with this law 25. Responses to this question were very similar across all employers, with the majority believing that there would be a fixed penalty or fine. 25 This question was added in Autumn 2011 of the survey. TPR s Compliance and Enforcement Strategy and Policy was published on 20 June Details can be found at 47

50 Employers awareness, understanding and activity relating to workplace pension reforms, Expectations of enforcement among all employers Three in five (62%) of all employers believed enforcement action would take the form of a fixed penalty or fine. Around one in ten (9%) believed failure to comply would result in prosecution, and one in twenty (3%) that it would incur a warning letter. Overall a third (32%) did not know what enforcement action would be taken. Figure 33: Expectations of enforcement among all employers 100% 80% 60% 62% 40% 32% 20% 9% 3% 2% 2% 0% Fixed penalty/fine Prosecution Warning letter Other None Don't know (714) Q: What enforcement action do you believe will be taken against an organisation that does not comply with this law? Unweighted base in parentheses Expectations of enforcement among all private sector employers Results among all private sector employers were entirely consistent with those outlined above, and with results on this measure in Autumn Figure 34: Expectations of enforcement among all private sector employers over time Q: What enforcement action do you believe will be taken against an organisation that does not comply with this law? Unweighted bases in parentheses 48

51 Research findings Expectations of enforcement among large employers Seven in ten (72%) large employers believed enforcement action would take the form of a fixed penalty or fine, around one in ten (13%) that it would result in prosecution, and one in five (20%) did not know what form enforcement action might take. While the majority (70%) of large private sector employers continued to believe enforcement action would take the form of a fixed penalty or fine, there was an increase of nine percentage points to 14% who believed non-compliance would lead to prosecution. The majority (82%) of large public sector employers also believed enforcement action would take the form of a fixed penalty or fine, and to a greater extent than large private sector employers. They were correspondingly less likely to believe non-compliance would lead to prosecution than large private sector employers (6% and 14% respectively). Figure 35: Expectations of enforcement among all large employers, large private sector employers over time and large public sector employers Q: What enforcement action do you believe will be taken against an organisation that does not comply with this law? Unweighted bases in parentheses 49

52 Employers awareness, understanding and activity relating to workplace pension reforms, Expectations of enforcement among medium, small and micro private sector employers The pattern of response among medium, small and micro private sector employers was similar, and consistent with Autumn 2011 results, with all size bands most likely to believe that enforcement would take the form of a fixed penalty or fine (70%, 64% and 60% respectively). Figure 36: Expectations of enforcement among medium, small and micro private sector employers over time Q: What enforcement action do you believe will be taken against an organisation that does not comply with this law? Unweighted bases in parentheses 50

53 Research findings 3.8 The Regulator Organisations believed to be responsible for overseeing introduction of automatic enrolment Employers were asked which organisations they thought were responsible for overseeing the introduction of automatic enrolment. The organisations who are responsible are: DWP is responsible for the policy, legislation and overarching communications for the changes; The Pensions Regulator's role in these reforms is to maximise compliance with the employer duties set out in the Act, and ensure certain safeguards protecting workers are adhered to Organisations believed to be responsible for overseeing introduction of automatic enrolment among all employers Two in five (37%) of all employers did not know who was responsible for overseeing the introduction of automatic enrolment, one in five (18%) believed it to be the Department for Work and Pensions, and a similar proportion HMRC (17%). Around one in ten (9%) believed the employer themselves was responsible, and one in twenty (5%) believed the Regulator was responsible. Figure 37: Organisations believed to be responsible for overseeing introduction of automatic enrolment among all employers 50% 40% 37% 30% 20% 10% 18% 17% 13% 9% 5% 3% 0% Department for Work and Pensions HMRC The Pensions Service The employer (714) The Pensions A Government Regulator (TPR) body Don't know Q: Can you please tell me which organisations you think are responsible for overseeing the introduction of automatic enrolment? Unweighted base in parentheses. Mentions 2% or more Organisations believed to be responsible for overseeing introduction of automatic enrolment among all private sector employers The pattern of response among private sector employers was very much in line with that outlined above, however there has been an increase in the proportion mentioning the Regulator (from 2% in Autumn 2011 to 5% in, returning 51

54 Employers awareness, understanding and activity relating to workplace pension reforms, to the levels seen in Spring 2011), and in the proportion mentioning the Pension Service (from 4% in Autumn 2011 to 13% in ). There has also been a decrease in the proportion who said that they did not know who was responsible (from 51% in Autumn 2011 to 37% in ). Figure 38: Organisations believed to be responsible for overseeing introduction of automatic enrolment among all private sector employers over time Q: Can you please tell me which organisations you think are responsible for overseeing the introduction of automatic enrolment? Unweighted bases in parentheses. Mentions 2% or more Organisations believed to be responsible for overseeing introduction of automatic enrolment among large employers While a fifth (20%) of large employers said they did not know who was responsible for overseeing the introduction of automatic enrolment three in ten (31%) did attribute responsibility to the Regulator. A fifth (20%) believed the Department for Work and Pensions was responsible, and one in seven (14%) that it was the responsibility of the Pensions Service. Among large private sector employers this pattern is largely repeated, with the Regulator mentioned most often as being responsible (32%). There was also a significant increase in the proportion mentioning the Pensions Service, HMRC (from 3% in Autumn 2011 to 13% in in both instances), the employer themselves (from 1% in Autumn 2011 to 11% in ), the Pension Ombudsman (from 0% in Autumn 2011 to 8% in ) and the Department for Business Innovation and Skills (from 1% in Autumn 2011 to 7% in ), and a significant decrease in the proportion who said that they did not know who was responsible (from 35% in Autumn 2011 to 21% in ). Large public sector employers were as likely to mention the Pensions Service (24%) as being responsible as they were to mention the Regulator (22%), and to a greater extent than large private sector employers (13%) despite increases for the latter. 52

55 Research findings Large public sector employers were also more likely than large private sector employers to mention the employer themselves (20% compared to 11%), the Treasury (11% compared to 1%) or a government body (15% compared to 0%), and less likely to mention the Department for Work and Pensions (9% compared to 22%), the Pensions Ombudsman (1% compared to 8%) and the Department for Business Innovation and Skills (<0.5% compared to 7%). Figure 39: Organisations believed to be responsible for overseeing introduction of automatic enrolment among all large employers, large private sector employers over time and large public sector employers Q: Can you please tell me which organisations you think are responsible for overseeing the introduction of automatic enrolment? Unweighted bases in parentheses. Mentions 2% or more Organisations believed to be responsible for overseeing introduction of automatic enrolment among medium private sector employers More medium private sector employers were now able to name an organisation being responsible for overseeing the introduction of automatic enrolment, from 61% in Autumn 2011 to 72% at. The largest proportion, three in ten (31%), believed the Department for Work and Pensions was responsible, with around one in ten mentioning the Pensions Service (12%, an increase of ten percentage points since Autumn 2011), HMRC (12%) and the Regulator (11%). 53

56 Employers awareness, understanding and activity relating to workplace pension reforms, Organisations believed to be responsible for overseeing introduction of automatic enrolment among small private sector employers Similarly more small private sector employers named an organisation as being responsible for automatic enrolment, from 50% in Autumn 2011 to 71% in Spring The largest proportion, a quarter (23%), believed the Department for Work and Pensions was responsible, with one in five mentioning the Pensions Service (19%, an increase of sixteen percentage points since Autumn 2011), one in seven (15%) HMRC, and around one in twenty (6%) the Regulator Organisations believed to be responsible for overseeing introduction of automatic enrolment among micro private sector employers One in five (18%) micro private sector employers believed HMRC was responsible for overseeing the introduction of automatic enrolment, with one in seven (15%) mentioning the Department for Work and Pensions, one in ten the Pensions Service (11%, an increase of seven percentage points since Autumn 2011), and one in twenty (5%) the Regulator. Again more micro private sector employers were able to name an organisation, from 49% in Autumn 2011 to 60% in. Figure 40: Organisations believed to be responsible for overseeing introduction of automatic enrolment among medium, small and micro private sector employers over time Q: Can you please tell me which organisations you think are responsible for overseeing the introduction of automatic enrolment? Unweighted bases in parentheses. Mentions 2% or more. 54

57 Research findings Awareness of the Regulator Awareness of the Regulator among all employers Overall, two thirds (64%) of all employers had heard of the Regulator, including around one in twenty (3%) who knew a lot, a quarter (24%) who had heard the name but only knew a little, and a third (35%) who had only heard the name before. Figure 41: Awareness of the Regulator among all employers 50% 40% 35% 36% 30% 24% 20% 10% 3% 0% Know a lot Heard the name but only know a little Heard the name but know nothing Never heard of them (714) Q: The Pensions Regulator is responsible for informing and making sure employers comply with the new duties. How familiar are you with the Pensions Regulator? Unweighted base in parentheses Awareness of the Regulator among all private sector employers Three in five (61%) private sector employers had heard of the Regulator, an increase of thirteen percentage points since Autumn 2011, driven by an increase in the proportion who had heard the name but know nothing (from 28% to 35%). Figure 42: Awareness of the Regulator among all private sector employers Q: The Pensions Regulator is responsible for informing and making sure employers comply with the new duties. How familiar are you with the Pensions Regulator? Unweighted bases in parentheses 55

58 Employers awareness, understanding and activity relating to workplace pension reforms, Awareness of the Regulator among large employers Nine in ten (88%) large employers had heard of the Regulator, including three in ten (30%) who knew a lot, and close to half (44%) who knew a little. This pattern was reflected among all large private sector employers, with little change since Autumn However, awareness was lower among large public sector employers than among large private sector employers (74% compared to 90%), with 15% reporting that they knew a lot (compared to 33% of large private sector employers). Figure 43: Awareness of the Regulator among all large employers, large private sector employers over time and large public sector employers Q: The Pensions Regulator is responsible for informing and making sure employers comply with the new duties. How familiar are you with the Pensions Regulator? Unweighted bases in parentheses Awareness of the Regulator among medium, small and micro private sector employers More medium, small and micro private sector employers said they were aware of the Regulator, although increases were only significant among micro employers, among whom three in five (58%) were aware. Four in five (78%) medium and two thirds (68%) of small private sector employers were aware of the Regulator. 56

59 Research findings Figure 44: Awareness of the Regulator among medium, small and micro private sector employers over time Q: The Pensions Regulator is responsible for informing and making sure employers comply with the new duties. How familiar are you with the Pensions Regulator? Unweighted bases in parentheses Source of awareness of the Regulator Where employers had heard of the Regulator they were asked where they had heard about them Source of awareness of the Regulator among all employers Among all employers national press was the source mentioned most often (16%), followed by the internet (10%). One in twenty (5%) said they currently deal with the Regulator, and the same proportion that they had heard about the Regulator from their professional advisor/consultant. 57

60 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 45: Source of awareness of the Regulator among all employers 50% 40% 30% 20% 10% 16% 10% 5% 5% 3% 3% 3% 3% 3% 3% 6% 0% National press Internet Currently deal Professional advisor Trade press Direct mail/post Pension provider (714) Media (unspecified) Press (unspecified) Dealt with in the past Don't know Q: Where have you heard about the Pensions Regulator before? Unweighted base in parentheses. Mentions 3% or more Source of awareness of the Regulator among all private sector employers Among all private sector employers the pattern of response reflected that outlined above, with national press as the source mentioned most often (16%, an increase of seven percentage points on Autumn 2011), followed by the internet (10%, again an increase of seven percentage points on Autumn 2011). Figure 46: Source of awareness of the Regulator among all private sector employers over time Q: Where have you heard about the Pensions Regulator before? Unweighted bases in parentheses. Mentions 3% or more. 58

61 Research findings Source of awareness of the Regulator among large employers Three in ten (29%) large employers said they knew about the Regulator because they currently have dealings, and one in ten that they had heard about the Regulator via (10%), via an advisor (8%), in the national press (8%), or via the internet (8%). Results for large private sector employers are similar, although there has been an increase in the proportion who mentioned (up eight percentage points to 11%), and conferences/events (up five percentage points to 5%). Fewer large public sector employers mentioned current dealings with the Regulator (10% compared to 33%), with more of this group mentioning another government body (7% compared to 1%) and general news coverage (11% compared to 1%). Figure 47: Source of awareness of the Regulator among all large employers, large private sector employers over time, and large public sector employers Q: Where have you heard about the Pensions Regulator before? Unweighted bases in parentheses. Mentions 2% or more Source of awareness of the Regulator among medium, small and micro private sector employers Medium private sector employers were most likely to mention the internet as their source of awareness of the Regulator (up ten percentage points to 17%), while small private sector employers were most likely to mention national press (12%), as 59

62 Employers awareness, understanding and activity relating to workplace pension reforms, were micro private sector employers (up eight percentage points to 17%). There were also increases for micro private sector employers in relation to the internet (up seven percentage points to 10%). Figure 48: Source of awareness of the Regulator among medium, small and micro private sector employers Q: Where have you heard about the Pensions Regulator before? Unweighted bases in parentheses. Mentions 2% or more Use of the internet Around one in twenty (4%) of all employers reported never personally using the internet for business purposes. In contrast, four in five (78%) reported using the internet every day for business purposes. Considering this by employer size, one in twenty (5%) of micro private sector employers reported never personally using the internet for business purposes, while three quarters (76%) reported using the internet every day. Two per cent of small private sector employers and one per cent of medium private sector employers reported never using the internet Use of TPR resources Use of TPR resources among all employers Overall one in twenty (5%) of all employers reported having used the Regulator s website to source information about automatic enrolment, and among this group the 60

63 Research findings most common action was to download or view a PDF document (61%, equating to 3% of all employers). The most commonly downloaded or viewed documents were the leaflets or summary documents providing an overview of the reforms (70%, equating to 2% of all employers) and the checklist of actions that should be taken regarding the reforms (56%, equating to 2% of all employers). Three in five (28%, equating to 1% of all employers) reported downloading or viewing the detailed technical guidance about the reforms. Half of those who had used the website used the pension reform interactive tools (52%, equating to 2% of all employers), or found contact details (45%, equating to 2% of all employers), while around one in ten (9%) used the Trustee toolkit, and a similar proportion (8%) logged on to Exchange, the Regulator s online service that enables employers to share important information about their schemes. Where employers had used the Regulator s website, nine in ten (93%) found it useful, including a fifth (17%) who found it very useful. Overall, around one in twenty (3%) of all employers were aware that the Regulator has recently published the Six principles for good workplace DC, and two in five (37%) were aware that the Department for Work and Pensions provides help to employers in communicating with workers about automatic enrolment Use of the Regulator s resources among all private sector employers Given that the results described above were very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%) Use of the Regulator s resources among large employers Two in five (39%) of all large employers had used the Regulator s website to source information about automatic enrolment, and within this large private sector employers were more likely than large public sector employers to have used it (41% compared to 25%). This represents an increase among large private sector employers of thirteen percentage points compared with Autumn Among large employers who had used the internet four in five (84%) downloaded or viewed a PDF document, seven in ten (69%) sourced contact details, two in five (42%) used the Trustee toolkit, a third logged on to Exchange, and three in ten (31%) used the pension reform interactive tools. Where they had downloaded or viewed a document, for nine in ten (88%) employers this was a leaflet or summary document providing an overview of the reforms, and for seven in ten employers this was detailed technical guidance (72%) or a checklist of actions that should be taken regarding the reforms (70%). Nine in ten (88%) of all large employers who had used the Regulator s website felt that the information they sourced was useful, including two in five (43%) who found it very useful. Overall, three in ten (29%) of all large employers were aware that the Regulator has recently published the Six principles for good workplace DC, and within this large 61

64 Employers awareness, understanding and activity relating to workplace pension reforms, private sector employers were more likely than large public sector employers to be aware (32% compared to 14%). Half (53%) of all large employers were aware that the Department for Work and Pensions provides help to employers in communicating with workers about automatic enrolment, and this was consistent across both private and public sector employers Use of the Regulator s resources among medium, small and micro private sector employers One in five (18%) of medium private sector employers had used the Regulator s website to source information about automatic enrolment, an increase of eleven percentage points since Autumn Around one in ten (7%) of small private sector employers had used the Regulator s website, in line with Autumn 2011 (5%), and around one in twenty (3%) of micro private sector employers had used it, again in line with Autumn 2011 (2%). Base sizes are insufficient to explore their use of the Regulator s website in more detail. Awareness that the Regulator has recently published the Six principles for good workplace DC ranged from 7% of medium private sector employers to 2% of micro private sector employers, and awareness that the Department for Work and Pensions provides help to employers in communicating with workers about automatic enrolment ranged from 45% of medium and small private sector employers to 34% of micro private sector employers. 3.9 Attitudes towards automatic enrolment Employers were asked to rate their level of agreement/disagreement with a range of attitudinal statements. These statements explore the extent to which employers agree with the principles behind automatic enrolment, and their views with regard to compliance. Before being asked to rate their level of agreement with these statements, employers were read the following explanation of the reforms: Between 2012 and April 2017 all workers aged 22 and over and earning over 7, need to be automatically enrolled into a workplace pension scheme. Companies with the largest PAYE schemes will be the first companies that the new law will apply to. The employer needs to contribute a percentage of the worker s salary. From now on we will refer to this new law as automatic enrolment. 26 This amount is in 2010/11 terms and will be reviewed annually. This figure has been increased to 8,105 from 15 th June

65 Research findings Attitudes towards automatic enrolment among all employers Three in five (58%) of all employers agreed that the introduction of automatic enrolment is a good idea for their employees, two thirds (64%) that their organisation will be able to deal with any additional administrative demands and half (50%) that it will be easy to comply. In contrast over one in five disagreed with each of the statements (28%, 20% and 25% respectively). Half (48%) of all employers agreed that their organisation would leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment, while three in ten (31%) disagreed that this would be the case. Figure 49: Attitudes towards automatic enrolment among all employers I think the introduction of automatic enrolment is in principle a good idea for my workers 22% 35% 12% 14% 14% 2% My organisation will be able to deal with any additional administrative demands involved in implementing automatic enrolment 21% 43% 12% 11% 10% 4% I think it will be easy to comply 14% 36% 21% 15% 11% 4% My organisation will leave it as late as possible before we think about how to comply with the introduction of automatic enrolment 22% 26% 19% 19% 12% 3% Strongly agree Tend to agree Neither agree nor disagree Tend to disagree Strongly disagree Not applicable Q: In relation to your organisation, to what extent do you agree or disagree with the following statements? Unweighted base = Attitudes towards automatic enrolment among all private sector employers Three in five (58%) of all private sector employers agreed that the introduction of automatic enrolment is a good idea for their employees, an increase of eight percentage points since Autumn There were also increases in agreement that their organisation will be able to deal with any additional administrative demands (up nine percentage points to 64%) and that it will be easy to comply (up six percentage points to 50%). In each instance levels of agreement now match those achieved in Spring 2011, following declines since Autumn Levels of disagreement have remained stable over the three waves of research. Half (48%) of all private sector employers continued to agree that their organisation would leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment, while three in ten (30%) disagreed that this would be the case. 63

66 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 50: Attitudes towards automatic enrolment among all private sector employers over time Q: In relation to your organisation, to what extent do you agree or disagree with the following statements? Unweighted bases in parentheses Attitudes towards automatic enrolment among large employers Among all large employers, seven in ten (70%) agreed that automatic enrolment is a good idea, four in five (81%) that they will be able to deal with any additional administration, and three in five (57%) that it will be easy to comply. One in ten (9%) agreed they would leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment. Attitudes towards of the reforms have remained largely unchanged among large private sector employers, with seven in ten (69%) agreeing that automatic enrolment is a good idea, four in five (82%) that they will be able to deal with any additional administration, and three in five (56%) that it will be easy to comply. However it should be noted that, in relation to agreement that automatic enrolment is a good idea, while there has been no decline since Autumn 2011, there has been a decrease of twelve percentage points since Spring Large public sector employers views were very much in line with those for large private sector employers, with one in ten (9%) of both groups agreeing that their organisation would leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment. 64

67 Research findings Figure 51: Attitudes towards automatic enrolment among all large employers, large private sector employers over time and large public sector employers Q: In relation to your organisation, to what extent do you agree or disagree with the following statements? Unweighted base in parentheses Attitudes towards automatic enrolment among medium private sector employers Two in three (64%) medium private sector employers continued to agree that automatic enrolment is a good idea, four in five (78%) that they will be able to deal with any additional administration, and two in three (67%) that it will be easy to comply. However it should be noted that, as with large private sector employers, while there has been no decline since Autumn 2011 in relation to agreement that automatic enrolment is a good idea, there has been a decline of fourteen percentage points since Spring 2011 to 64%. A quarter (25%) of medium private sector employers agreed that their organisation will leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment, while three in five (60%) disagreed that this would be the case. 65

68 Employers awareness, understanding and activity relating to workplace pension reforms, Attitudes towards automatic enrolment among small private sector employers The response among small private sector employers has also been very consistent over the three waves of research, with seven in ten (68%) agreeing that automatic enrolment is a good idea, three in four (74%) that they will be able to deal with any additional administration, and three in five (56%) that it will be easy to comply. Two in five (40%) of small private sector employers agreed that their organisation will leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment, and a similar proportion (43%) disagreed that this would be the case Attitudes towards automatic enrolment among micro private sector employers Along with the larger size bands, the response among micro private sector employers has also been very consistent over time, with over half (55%) agreeing that automatic enrolment is a good idea, three in five (60%) that they will be able to deal with any additional administration, and half (48%) that it will be easy to comply. Half (51%) of micro private sector employers agreed that their organisation will leave it as late as possible before thinking about how to comply with the introduction of automatic enrolment, while one in four (25%) disagreed that this would be the case. Figure 52: Attitudes towards automatic enrolment among medium, small and micro private sector employers over time Q: In relation to your organisation, to what extent do you agree or disagree with the following statements? Unweighted bases in parentheses 66

69 Research findings Attitudes towards automatic enrolment among all employers by geography The figure below outlines the results by geography, and indicates that those in Scotland were least likely to agree that the introduction of automatic enrolment is a good idea (39%). Results were more consistent across geography with regard to the other attitude statements. Figure 53: Attitudes towards automatic enrolment among all employers by geography % agree Good idea Able to deal with admin Easy to comply Leave as late as possible Wales (32) 54% 68% 44% 59% Scotland (57) 39% 52% 47% 50% North England (NE, NW, Y&H) (137) 67% 64% 51% 47% Midlands (EM, WM, E) (172) 57% 60% 53% 44% South England (London, SE, SW) (302) 57% 66% 48% 48% Q: In relation to your organisation, to what extent do you agree or disagree with the following statements? Unweighted bases in parentheses Attitudes towards automatic enrolment among all employers by standard industrial classification The figure below outlines the results by standard industrial classification, and indicates that those in the public administration, education and health sectors tended to be more likely to agree that automatic enrolment is in principle a good idea (82%, 78% and 77% respectively), and those in the public administration and education sectors were less likely to agree that they would leave it as late as possible before thinking about how to comply (18% and 3% respectively). In contrast, those in the accommodation and food services sector were least likely to agree that it is a good idea (45%) and most likely to agree that they would leave it as late as possible before thinking about how to comply (74%). Figure 54: Attitudes towards automatic enrolment among all employers by standard industrial classification % agree Good idea Able to deal with admin Easy to comply Leave as late as possible Production (89) 52% 52% 41% 43% Construction (47) 61% 58% 52% 50% Wholesale and retail; repair of motor vehicles (89) 62% 66% 58% 52% Accommodation & food services (35) 45% 71% 35% 74% Professional, scientific & technical (75) 50% 59% 36% 42% Business administration and support services (47) 46% 58% 60% 52% Public admin (68) 82% 66% 65% 18% Education (33) 78% 69% 67% 3% Health (92) 77% 83% 72% 47% Arts, entertainment, recreation and other services (32) 59% 81% 62% 64% Q: In relation to your organisation, to what extent do you agree or disagree with the following statements? Unweighted bases in parentheses 67

70 Employers awareness, understanding and activity relating to workplace pension reforms, 3.10 Consultation on automatic enrolment Employers were asked whether they had consulted anyone about the introduction of automatic enrolment Consultation on automatic enrolment among all employers One in six (16%) of all employers said that they had consulted a third party about the introduction of automatic enrolment, and almost all of these (13%) mentioned a professional intermediary: Pension provider 4%; Accountant 4%; IFA 3%; Pension consultant/ebc 2% Consultation on automatic enrolment among all private sector employers One in seven (15%) of all private sector employers said that they had consulted a third party about the introduction of automatic enrolment, an increase of five percentage points since both Spring 2011 and Autumn Again, almost all of these (13%) mentioned a professional intermediary: Pension provider 4%; Accountant 4%; IFA 3%; Pension consultant/ebc 2% Consultation on automatic enrolment among large employers Two thirds (67%) of all large employers said they had consulted a third party about automatic enrolment, and over half (54%) reported having consulted an intermediary, most commonly a pensions consultant (22%), a pension provider (18%) or an IFA (12%). For large private sector employers there has been an increase in the proportion who reported having consulted, from 58% in Spring 2011 and 59% in Autumn 2011, to 70% in, again most commonly a pensions consultant (25%), a pension provider (18%) or an IFA (13%). Large public sector organisations were less likely than large private sector organisations to report having consulted (52% compared to 70%), and they were correspondingly less likely to report having consulted a professional intermediary (32% compared to 58%). Within this they were less likely than large private sector employers to have consulted a pension consultant/ebc (3% compared to 25%) or an IFA (1% compared to 13%). 68

71 Research findings Figure 55: With whom consulted about automatic enrolment among all large employers, large private sector employers over time and large public sector employers Q: Who did you consult with regards to automatic enrolment? Unweighted bases in parentheses. Mentions 3% or more Consultation on automatic enrolment among medium private sector employers Over two in five (45%) medium private sector employers reported having consulted a third party on automatic enrolment and, while this was in line with Autumn 2011 results (38%), it was higher than Spring 2011 results (33%). This was also the case in relation to the proportion who reported having consulted a professional intermediary (40% in, compared to 35% in Autumn 2011 and 26% in Spring 2011). One in seven (15%) of this group reported consulting an IFA, and one in ten a pensions consultant/ebc (12%) or a pension provider (9%) Consultation on automatic enrolment among all private sector employers A quarter (24%) of small private sector employers reported having consulted a third party on automatic enrolment and this has remained stable since Autumn 2011 (25%) following an increase since Spring 2011 (15%). Small private sector employers had most commonly consulted with an IFA (10%) or a pension provider (7%). 69

72 Employers awareness, understanding and activity relating to workplace pension reforms, Consultation on automatic enrolment among micro private sector employers The proportion of micro private sector employers who reported having consulted has remained stable over the three waves (8%, 5% and 11% respectively), with accountants mentioned most often (5%), along with pension providers (3%). Figure 56: With whom consulted about automatic enrolment among all medium, small and micro private sector employers over time Q: Who did you consult with regards to automatic enrolment? Unweighted bases in parentheses. Mentions 3% or more Level of preparation for automatic enrolment In, employers were asked which of a range of statements best describes what they have done to prepare for the introduction of automatic enrolment Level of preparation for automatic enrolment among all employers In total a fifth (21%) of all employers reported having taken some action to prepare for the introduction of automatic enrolment. Around one in ten (13%) reported that planning had begun, one in twenty (5%) that plans had been drawn up (whether acted upon or not at this stage), and around one in twenty (3%) that plans had been fully implemented. 27 Changes to the response options for this question preclude comparisons with Spring 2011 and Autumn 2011 results. 70

73 Research findings However, half (52%) of all employers reported that their organisation has not done anything yet to prepare for the introduction of automatic enrolment, while a further quarter (24%) of all employers were unaware of the changes. Figure 57: Level of preparation among all employers Fully implemented plans 3% Drawn up plans and started to act on them 2% Drawn up plans but not acted on them 3% Begun planning 13% Not done anything yet 52% Don't know 1% Does not think it applies 2% Unaware of changes 24% (714) Q: Which, if any, of the following best describes what your organisation has done to prepare for the introduction of automatic enrolment? Unweighted base in parentheses Level of preparation for automatic enrolment among all private sector employers Reflecting the results outlined above for all employers, in total a fifth (20%) of all private sector employers reported having taken some action to prepare for the introduction of automatic enrolment. Around one in ten (12%) reported that planning had begun, one in twenty (5%) that plans had been drawn up (whether acted upon or not at this stage), and around one in twenty (3%) that plans had been fully implemented. Half (52%) of all private sector employers reported having taken no action yet to prepare for the introduction of automatic enrolment Level of preparation for automatic enrolment among large employers In total four in five (82%) large employers reported having taken some action.; one in twenty (6%) reported that they had fully implemented their plans, a quarter (25%) that they had drawn up plans and begun to act upon them, around one in ten (11%) that they had drawn up plans but not yet taken any action, and two in five (40%) that they had begun planning. Among large employers in both the private and the public sector around one in ten (12% and 13% respectively) reported having taken no action yet to prepare for the introduction of automatic enrolment. Two in five (40%) of both groups reported 71

74 Employers awareness, understanding and activity relating to workplace pension reforms, having begun planning, and around one in ten (11%) of both groups reported having drawn up plans that are yet to be acted upon. Large public sector employers were more likely than large private sector employers to report that they had fully implemented their plans (13% compared to 5%), while large private sector employers were more likely than large public sector employers to report that they had drawn up plans and started to act on them (26% compared to 15%). However, overall, the proportions who reported having taken some action to prepare were consistent across both groups (private sector 82%, public sector 81%). Figure 58: Level of preparation among all large employers, large private and large public sector employers Q: Which, if any, of the following best describes what your organisation has done to prepare for the introduction of automatic enrolment? Unweighted bases in parentheses Level of preparation for automatic enrolment among medium private sector employers In total, two thirds (65%) of medium private sector employers reported having taken some action to prepare for the introduction of automatic enrolment. A third (35%) reported having begun planning, a fifth (17%) having drawn up plans but not acted on them, one in ten (10%) having drawn up plans and started to act on them, and around one in twenty (3%) having fully implemented their plans. Three in ten (28%) medium private sector employers reported having taken no action yet to prepare for the introduction of automatic enrolment. 72

75 Research findings Level of preparation for automatic enrolment among small private sector employers In total, a third (35%) of small private sector employers reported having taken some action to prepare for the introduction of automatic enrolment. One in five (19%) reported having begun planning, around one in ten (8%) having drawn up plans (whether acted upon or not at this stage), and a similar proportion (8%) having fully implemented their plans. As well as the one in ten (13%) small private sector employers who were unaware of the changes, a further half (51%) of small private sector employers reported having taken no action yet to prepare for the introduction of automatic enrolment Level of preparation for automatic enrolment among micro private sector employers Few, one in seven (14%), micro private sector employers reported having taken some action to prepare for the introduction of automatic enrolment. Around one in ten (9%) reported having begun planning, and one in twenty (5%) drawing up or having fully implemented their plans. Figure 59: Level of preparation among medium, small and micro private sector employers Q: Which, if any, of the following best describes what your organisation has done to prepare for the introduction of automatic enrolment? Unweighted bases in parentheses 73

76 Employers awareness, understanding and activity relating to workplace pension reforms, Level of preparation for automatic enrolment among all employers by geography The figure below outlines the results by geography, and indicates that those in Scotland were least likely to have started to act (less than 0.5%). Figure 60: Level of preparation for automatic enrolment among all employers by geography Fully implemented/ started to act In planning stages Not done anything Not aware of changes Wales (32) 6% 8% 57% 29% Scotland (57) <0.5% 12% 42% 45% North England (NE, NW, Y&H) (137) 11% 17% 44% 24% Midlands (EM, WM, E) (172) 5% 19% 54% 21% South England (London, SE, SW) (302) 4% 16% 55% 20% Q: Which, if any, of the following best describes what your organisation has done to prepare for the introduction of automatic enrolment? Unweighted bases in parentheses Level of preparation for automatic enrolment among all employers by standard industrial classification The figure below outlines the results by standard industrial classification, and indicates that those in the education sector were most likely to have started to act/to have fully implemented their plans (33%) and to be in the planning stages (38%). In contrast, three quarters (73%) of those in the arts, entertainment, recreation and other services sector reported having taken no action at this stage. Figure 61: Level of preparation for automatic enrolment among all employers by standard industrial classification Fully implemented/ started to act In planning stages Not done anything Not aware of changes Production (89) 3% 15% 57% 21% Construction (47) 5% 15% 52% 28% Wholesale and retail; repair of motor vehicles (89) 3% 19% 65% 12% Accommodation & food services (35) <0.5% 10% 46% 43% Professional, scientific & technical (75) 6% 22% 56% 12% Business administration and support services (47) 5% 20% 36% 39% Public admin (68) 12% 36% 35% 1% Education (33) 33% 38% 28% 0% Health (92) 7% 11% 38% 44% Arts, entertainment, recreation and other services (32) 7% 3% 73% 10% Q: Which, if any, of the following best describes what your organisation has done to prepare for the introduction of automatic enrolment? Unweighted bases in parentheses 74

77 Research findings 3.12 Preparation for automatic enrolment undertaken and use of external advisors Preparation for automatic enrolment undertaken and whether external advisors used One in five (21%) employers, the majority of which are medium and large employers, who reported having fully implemented their plans or having started planning were asked which elements of automatic enrolment they had already completed or begun to undertake. Where they had begun or completed each element, they were asked whether they had used an external consultant to help them with this Preparation for automatic enrolment undertaken and whether external advisors used among all employers The elements most likely to have been begun or completed among all employers include: Identifying eligible workers (16% begun or completed); Working out which parts will be carried out internally and which will be carried out by an external advisor (12% begun or completed); Engaging the relevant departments/external organisations (12% begun or completed). All other elements were reported as having been begun or completed by around one in ten (9% to 11%) apart from finding out what needs to be done to register with the appropriate government body (7%), and working out how much it will cost to implement the changes (6%). Among those who had begun or completed the various elements, external advisors were most likely to have been used to help with understanding what they need to do to register (70%), which pension scheme to use (65%), working out a timetable (58%) and working out how much the pension contributions will cost (57%). External advisors were least likely to have been used to help assess the impact on their payroll system (28%), to work out how much it will cost to implement the changes (36%), to identify eligible workers (37%) and to communicate the changes to workers (38%). Overall around one in ten (11%) of all employers reported having used an external advisor to help with elements of automatic enrolment. 75

78 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 62: Elements of automatic enrolment begun or completed among all employers, and whether external consultant used among all employers who have begun or completed each element Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me whether your organisation has begun this, completed this, or not yet begun this. Q: Have you used an external consultant to help you with this? Unweighted bases in parentheses Preparation for automatic enrolment undertaken and whether external advisors used among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%). Preparation for automatic enrolment undertaken and whether external advisors used among large employers The elements most likely to have been begun or completed among all large employers include: Investigating which pension scheme to use for automatic enrolment (72% begun or completed); Understanding what their ongoing duties are (67%); Engaging the relevant departments/external organisations (64%); Working out which parts will be carried out internally/externally (61%); Working out a timetable (59%). 76

79 Research findings Elements where fewer large employers had begun or completed included working out how much it will cost to implement the changes (42%) and finding out what they need to do to register with the appropriate government body (45%). Among those who had begun or completed the various elements, external advisors were most likely to have been used to help work out a timetable (67%), work out which pension scheme to use (55%), understand what their ongoing duties are (49%) and understand what they need to do to register (49%). External advisors were least likely to have been used to help identify eligible workers (29%), to help communicate the changes to workers (36%) and to work out how much it will cost to implement the changes (37%). Overall half (50%) of all large employers reported having used an external advisor to help with elements of automatic enrolment. Figure 63: Elements of automatic enrolment begun or completed among all large employers, and whether external consultant used among all large employers who have begun or completed each element Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me whether your organisation has begun this, completed this, or not yet begun this. Q: Have you used an external consultant to help you with this? Unweighted bases in parentheses 77

80 Employers awareness, understanding and activity relating to workplace pension reforms, For both private and public sector large employers the elements most likely to have been begun or completed were: Working out which pension scheme to use (75% and 57% respectively); Understanding what their ongoing duties are (68% and 59%); Engaging the relevant departments/external organisations (66% and 50%). For both private and public sector large employers the elements least likely to have been begun or completed were: Working out how much it will cost to implement the changes (45% and 26% respectively); Finding out what you need to do to register with the appropriate government body (47% and 36%). Considering differences between large private sector and large public sector employers, large private sector employers were more likely to have begun or completed: Working out which pension scheme to use (75% begun or complete compared to 57%); Engaging the relevant departments/external organisations (66% compared to 50%); Working out which parts will be carried out internally and which will be carried out by an external advisor (63% compared to 48%); Working out how much the pension contributions will cost (58% compared to 38%); Working out how much it will cost to implement the changes excluding the contribution costs (45% compared to 26%). 78

81 Research findings Figure 64: Elements of automatic enrolment begun or completed among large private and large public sector employers Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me whether your organisation has begun this, completed this, or not yet begun this. Unweighted bases in parentheses While over half (56%) of all large private sector employers reported having used an external advisor to help with elements of automatic enrolment, this fell to 21% of large public sector employers. The proportion of large private sector employers who had used an external consultant ranged from three quarters (75%) who had used one to help in working out a timetable to implement the changes, to a third (32%) who had used one to help identify the eligible workers to enrol. The proportion of large public sector employers who had used an external consultant ranged from a quarter (23%) who had used one to help in assessing the impact on the payroll system, to one in seven (14%) who had used one to help work out how much it will cost to implement the changes excluding the contribution costs. 79

82 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 65: Whether external consultant used among large private and large public sector employers who have begun or completed each element Q: Have you used an external consultant to help you with this? Unweighted bases in parentheses Elements of automatic enrolment undertaken and whether external advisors used among medium private sector employers The elements most likely to have been begun or completed among medium employers include: Which pension scheme to use (42% begun or completed); Working out which parts will be carried out internally/externally (41%); Identifying eligible workers (40%). The proportion of medium private sector employers who reported having begun or completed the other elements of automatic enrolment varied between 33% and 41% except in relation to working out how to communicate the changes to workers (26%) and working out how much it will cost to implement the changes excluding the contribution costs (27%). Overall a third (36%) of all medium private sector employers reported having used an external advisor to help with elements of automatic enrolment. Medium private sector employers were most likely to report using an external advisor to help them choose which pension scheme to use (63%), to find out what they need to do to register with the appropriate government body (49%), to 80

83 Research findings understand what their ongoing duties are after the automatic enrolment process (45%) and to work out a timetable to implement the changes (45%). Medium private sector employers were least likely to report using an external advisor to help work out how to communicate the changes to workers (25%), to assess the impact on their payroll systems (26%) and to work out how much the pensions contributions will cost (27%). Figure 66: Elements of automatic enrolment begun or completed among all medium private sector employers, and whether external consultant used among medium private sector employers who have begun or completed each element Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me whether your organisation has begun this, completed this, or not yet begun this. Q: Have you used an external consultant to help you with this? Unweighted bases in parentheses Elements of automatic enrolment undertaken and whether external advisors used among small private sector employers The elements most likely to have been begun or completed among small employers include: Identifying eligible workers (27%); Working out a timetable (23%); Working out which parts will be carried out internally/externally (22%); Which pension scheme to use (22% begun or completed); Engaging relevant departments/organisations (22%). 81

84 Employers awareness, understanding and activity relating to workplace pension reforms, Base sizes were generally too low to report on whether external advisors were used for the various elements or not, although overall one in five (21%) of all small private employers reported having used an external advisor to help with elements of automatic enrolment Elements of automatic enrolment undertaken and whether external advisors used among micro private sector employers Few micro private sector employers reported having begun or completed any of the elements, although around one in ten (11%) of this group did report that they had begun or completed identifying the relevant workers. Base sizes were too low to report on whether external advisors were used for the various elements or not, although overall one in twenty (5%) of all small private employers reported having used an external advisor to help with elements of automatic enrolment. Figure 67: Elements of automatic enrolment begun or completed among all small and micro private sector employers Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me whether your organisation has begun this, completed this, or not yet begun this. Q: Have you used an external consultant to help you with this? Unweighted bases in parentheses 82

85 Research findings External advisors used Employers who had used an external advisor to undertake any elements of automatic enrolment (11% of all employers), were asked what types of advisors had carried out, or were carrying this out, on their behalf External advisors used among all employers Among all employers who had used an external advisor to undertake any elements of automatic enrolment (11% of all employers) two in five (40%) said they had used an IFA, a quarter (24%) an accountant, one in five (17%) a pensions consultant/ebc, and around one in ten (13%) a pension provider. Figure 68: External advisors used among all employers who have used, or begun to use, an external advisor 100% 92% 80% 60% 40% 20% 40% 24% 17% 13% 6% 4% 3% 2% 0% ANY INTERMEDIARY IFA Accountant Pensions consultant/ebc Pension provider (225) Trade /professional body Payroll administrator/provider Pensions administrator Actuary / risk management service Q: What type of external advisor has carried out, or is carrying this out on your behalf? Unweighted base in parentheses. Mentions 2% or more External advisors used among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%) External advisors used among large employers Among all large employers who had used an external advisor to undertake any elements of automatic enrolment (50% of large employers), a third (36%) had used 28 This question was added in. 83

86 Employers awareness, understanding and activity relating to workplace pension reforms, an IFA, three in ten (29%) had used a pension provider, a quarter (25%) had used a pensions consultant/ebc and one in ten (10%) a payroll administrator/provider. Among large private sector employers who had used an external advisor to undertake any elements of automatic enrolment (56% of large private sector employers) the pattern of results closely reflected those outlined above. While nine in ten (92%) of large private sector employers who had used an external advisor had used an intermediary, this figure was lower among large public sector employers who had used an external advisor (73%), reflecting the fact that they were less likely to report having used an external advisor (21%). Within this large public sector employers were less likely to report having used a pensions consultant/ebc (8% compared to 25%), but more likely to report having used a payroll administrator/provider (30% compared to 10%). Figure 69: External advisors used among all large employers, large private sector employers and large public sector employers who have used, or begun to use, an external advisor Q: What type of external advisor has carried out, or is carrying this out on your behalf? Unweighted bases in parentheses. Mentions 2% or more. 84

87 Research findings External advisors used among medium private sector employers A third (36%) of medium private sector employers had used an external advisor to undertake any elements of automatic enrolment. Among this group a third (36%) reported having used an IFA, three in ten (29%) a pension provider, and a quarter (24%) a pension consultant/ebc External advisors used among small private sector employers A fifth (21%) of small private sector employers had used an external advisor to undertake any elements of automatic enrolment. Among this group half (49%) reported having used an IFA, a fifth (20%) a pension provider, and one in six a pension consultant/ebc or an accountant (16% in both instances) External advisors used among micro private sector employers One in twenty (5%) micro private sector employers had used an external advisor to undertake any elements of automatic enrolment. Base sizes were too small to consider micro sector use of external advisors separately. Figure 70: External advisors used among medium and small private sector employers, who have used, or begun to use, an external advisor Q: What type of external advisor has carried out, or is carrying this out on your behalf? Unweighted bases in parentheses. Mentions 2% or more. 85

88 Employers awareness, understanding and activity relating to workplace pension reforms, 3.13 Tasks completed towards compliance with automatic enrolment Tasks completed towards compliance with automatic enrolment among all employers One in twenty (5%) reported having completed their investigations into which pension scheme to use, a further one in twenty (5%) reported having begun this process and one in twenty (5%) reported having actually chosen the pension scheme it is going to use for automatic enrolment. Three quarters (76%) of all employers reported being the person in the organisation who was or would be responsible for choosing a pension scheme for automatic enrolment, and among this group the main factors they would be likely to take into account when selecting a scheme were the cost. Overall around one in ten (11%) of all employers reported having begun or completed working out how to communicate the changes to workers, and a similar proportion (7%) reported having actually started communicating the changes to workers. Around one in ten (9%) reported having begun or completed assessing the impact on their payroll system, and a similar proportion (11%) reported having the HR and/or payroll systems in place to deal with automatic enrolment. Where they did not have the systems in place, the key reason was because it was felt to be too early Tasks completed towards compliance with automatic enrolment among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%) Tasks completed towards compliance with automatic enrolment among large employers Over half (54%) of all large employers said they have chosen the scheme they intend to use. Two fifths (41%) of all large employers reported being the person who was or would be responsible for choosing a pension scheme for automatic enrolment. Half (49%) of all large employers reported having begun or completed working out how to communicate to workers, and one in six (16%) said they had already started this process. Over half (55%) of all large employers reported having begun or completed assessing the impact on their payroll system, and a similar proportion (47%) reported having the HR and/or payroll systems in place to deal with automatic enrolment. In terms of actually having chosen which pension scheme to use, the proportion was consistent across both the private and public sector (55% and 50% 86

89 Research findings respectively). However, while close to half (45%) of large private sector employers said that they were or would be the person in the organisation who would have responsibility for this, this fell to one in six (16%) of large public sector employers. A half (50%) of private sector large employers reported having begun to or completed working out how to communicate the changes to workers, and one in six (16%) reported having started to actually do this. Two in five (43%) public sector large employers reported having begun to or completed working out how to communicate the changes to workers, and one in five (21%) reported having started to actually do this. Three in five (57%) private and close to half (46%) of public sector large employers reported having begun or completed assessing the impact on their payroll system. Half in each instance (47% and 50%) reported having put HR and/or payroll systems in place to deal with automatic enrolment Tasks completed towards compliance with automatic enrolment among medium private sector employers Among all medium private sector employers, two in five (42%) reported that they have begun or completed working out which pension scheme to use. One in five (22%) of all medium private sector employers reported that their organisation had actually chosen the pension scheme it is going to use for automatic enrolment, and two in five (41%) said that they were or would be the person in the organisation who would have responsibility for this. A quarter (26%) of all medium private sector employers reported that they had begun or completed working out how to communicate the changes to workers, and around one in ten (8%) reported having actually started doing so. A third (36%) of medium private sector employers reported that they had begun or completed assessing the impact on their payroll system, and a similar proportion (35%) reported having put HR and/or payroll systems in place to deal with automatic enrolment Tasks completed towards compliance with automatic enrolment among small private sector employers Around one in ten (12%) small private employers reported having actually begun to communicate the changes to workers. While one in five (22%) of all small private sector employers reported having put HR and/or payroll systems in place to deal with automatic enrolment, 15% reported that they have begun or completed assessing the impact of automatic enrolment on their payroll system. The same proportion (15%) reported that their organisation had chosen the pension scheme it is going to use for automatic enrolment, and two thirds (64%) reported that they were or would be the person responsible for doing so. 87

90 Employers awareness, understanding and activity relating to workplace pension reforms, Tasks completed towards compliance with automatic enrolment among micro private sector employers Few micro private sector employers reported having begun or completed any of the elements towards compliance with automatic enrolment Consideration of current scheme Consideration of current scheme among all employers A third (32%) of all employers reported providing a pension scheme for their workers, and within this half (48%) reported having a stakeholder scheme, one in five (17%) a group personal pension plan, one in five (20%) making contributions to workers private personal pension scheme, and one in twenty (3%) a final or average salary scheme and around one in ten (7%) a defined contribution occupational pension scheme. One per cent of the sample reported being a trustee of an existing scheme. Overall two thirds (68%) of all employers with a current scheme said that they would consider that scheme and, of this, a third (33%) reported that they had consulted a third party to find out whether their scheme can be used for automatic enrolment, most commonly an IFA (44%), an accountant (23%) or a pension administrator (17%). Among those who said they would consider their current scheme but had not yet consulted with anyone as to whether it was suitable for automatic enrolment, a third (33%) said they would do so within the next three months, half (53%) that they would do so within the next six months (including those who said they would do so in the next three months), three in five (58%) that they would do so within the next eighteen months. Two percent said they would do so in more than eighteen months Consideration of current scheme among all private sector employers There has been an increase in the proportion of private sector employers who reported offering a pension since Autumn 2011, up seven percentage points to 32%. Within this the profile of pension type very closely reflected that outlined above. Among those with a current pension the proportion who reported that they were considering this scheme for automatic enrolment remained stable across waves one and two (63% and 68% respectively). However, among those who were considering their current scheme, there was an increase of ten percentage points in the proportion who reported that they had consulted a third party about the suitability of their scheme, from 23% to 33%. In terms of who they have consulted, the pattern was similar across the two waves, with the majority having consulted an IFA (33% in Spring 2011 and 44% in Autumn 2011), or a pension administrator (9% and 17%), although there was an increase in relation to accountants, from 5% in Spring 2011 to 24% in Autumn

91 Research findings Consideration of current scheme among large employers The majority (96%) of all large employers reported providing a pension scheme for their workers, with two in five (38%) of these offering a group personal pension plan, a third (33%) offering a stakeholder pension scheme, three in ten (28%) offering a final or average salary scheme, a fifth (21%) a defined contribution occupational pension scheme, and around one in ten (8%) contributions to workers private personal pension schemes. Four in five (82%) of all large employers who offer pension schemes said they were considering using their current pension scheme for automatic enrolment, and of these three quarters (74%) reported having consulted a third party about its suitability, most commonly an IFA (40%) or a pension administrator (29%). Considering large private and large public sector employers, all large public sector employers reported providing a pension scheme for their workers, as did 95% of large private sector employers, in line with the 91% reported by large private sector employers in Autumn Among large private sector employers the majority reported offering either a group personal pension plan (48%) or a stakeholder pension scheme (44%), both of which were reported as being offered by two percent of large public sector employers. Seven in ten (69%) of large public sector employers reported providing a final or average salary scheme, which compared to a fifth (21%) of large private sector employers. Similar proportions of both groups mentioned offering defined contribution occupational pension schemes (private 22% and public 19%) and contributions to workers private personal pension schemes (private 8%, public 10%). Four in five (82%) of both large private and large public sector employers who offer pensions said that they were considering their current scheme for automatic enrolment, although a higher proportion of these large private sector employers reported having consulted on whether their scheme was suitable for automatic enrolment (76% compared to 63% of large public sector employers). This matched the 70% who reported having consulted on their scheme s suitability in Autumn Where they had consulted, large private sector employers were most likely to mention consulting an IFA (46% compared to 7% of large public sector employers), while large public sector employers were most likely to mention a pension administrator (42% compared to 27% of large private sector employers) Consideration of current scheme among medium private sector employers Over four in five (85%) of medium private sector employers reported providing a pension for their workers, which matches the proportion reporting this in Autumn 2011 (85%). The profile of pension type was very similar across the two waves, with half (48%) of medium private sector employers reporting offering a stakeholder pension, a third (33%) a group personal pension scheme, 16% a final or average salary scheme, 89

92 Employers awareness, understanding and activity relating to workplace pension reforms, 15% a defined contribution occupational scheme, and one in ten (10%) contributions to workers private personal pension schemes. Seven in ten (71%) medium private sector employers said that they were considering using their current scheme for automatic enrolment, in line with Autumn 2011 (62%), and of these three in five (62%) said that they had consulted a third party about their scheme s suitability, again in line with Autumn 2011 (58%), most commonly an IFA (40%) or a pension administrator (25%) Consideration of current scheme among small private sector employers Three in five (57%) of small private sector employers reported providing a pension for their workers, which is in line with the proportion reporting this in Autumn 2011 (51%). The profile of pension type was very similar across the two waves, with three in five (58%) of medium private sector employers reporting offering a stakeholder pension, a quarter (24%) a group personal pension scheme, 15% contributions to workers private personal pension schemes, around one in ten (7%) a defined contribution occupational scheme, and around one in twenty (3%) a final or average salary scheme. Three quarters (74%) of small private sector employers said that they were considering using their current scheme for automatic enrolment, in line with Autumn 2011 (62%), and of these two in five (40%) said that they had consulted a third party about their scheme s suitability, an increase of nineteen percentage points compared to Autumn 2011 (21%) Consideration of current scheme among micro private sector employers One fifth (22%) of micro private sector employers reported providing a pension for their workers, similar to Autumn 2011 (14%). Bases are too small for this group to provide robust findings in relation to types of pension or intentions to use schemes for automatic enrolment Intentions to consult with other parties Which external advisors intend to consult Employers were asked which, if any, of a number of types of advisors they were likely to consult about automatic enrolment in future Which external advisors intend to consult among all employers Two thirds (65%) of all employers said they would be likely to consult an accountant, half (48%) a pension provider, over two in five (44%) an IFA, three in ten (31%) a pension consultant, a quarter a trade or professional body (27%) or a pension administrator (23%), one in five (20%) a payroll administrator or provider, 29 This question was changed from an unprompted to a prompted question at, precluding comparisons with Spring 2011 and Autumn

93 Research findings one in six (16%) an HR advisor, and around one in ten a bookkeeper (11%) or a lawyer (9%). Figure 71: Who intend to consult among all employers (prompted) An accountant 65% Pension provider IFA/broker 48% 44% Pension consultant/ebc/pension advisor A trade/professional body Pension administrator Payroll administrator/provider HR advisor/outsourced HR services Trustee Bookkeeper Lawyer I do not intend to talk to any of these Don't know 31% 27% 23% 20% 16% 14% 11% 9% 6% 2% (265) Q: Which, if any, of the following types of advisors are you likely to consult about automatic enrolment in the future? Unweighted base in parentheses Which external advisors intend to consult among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%) Which external advisors intend to consult among large employers Among all large employers three in five (63%) said that they were likely to consult a pension provider, two in five a pension consultant/ebc (42%) or a payroll administrator/provider (40%) and a third a pension administrator (36%) or an IFA/broker (33%). A quarter of all large employers said they were likely to consult an HR advisor/outsourced HR services (27%), a lawyer (27%), an accountant (25%) or a trustee (25%), and a fifth (18%) a trade or professional body. There were some difference between large private and large public sector employers, with large private sector employers more likely to report a likelihood to consult with a pension consultant/ebc (45% compared to 28%) and an IFA (37% 91

94 Employers awareness, understanding and activity relating to workplace pension reforms, compared to 11%), and large public sector employers more likely to report a likelihood to consult with a pension administrator (60% compared to 32%) and a trade or professional body (33% compared to 15%). Large public sector employers were also more likely than large private sector employers to say that they do not intend to talk to any advisors (8% compared to 2%). Figure 72: Who intend to consult among all large employers, large private sector employers and large public sector employers (prompted) Q: Which, if any, of the following types of advisors are you likely to consult about automatic enrolment in the future? Unweighted bases in parentheses Which external advisors intend to consult among medium private sector employers As with large employers, medium private sector employers were most likely to say that they would be likely to consult a pension provider about automatic enrolment (68%). Two fifths of medium private sector employers mentioned the likelihood of consulting a pension consultant/ebc (43%), an IFA/broker (42%) or an accountant (39%) Which external advisors intend to consult among small private sector employers While over half (54%) of small private sector employers mentioned that they were likely to consult a pension provider, a similar proportion (58%) mentioned that they were likely to consult with an accountant. 92

95 Research findings Other advisors mentioned at higher levels by this group included IFAs/brokers (46%), pension consultants/ebcs (39%), pension administrators (32%), trade/professional bodies (28%) and payroll administrators (27%) Which external advisors intend to consult among micro private sector employers Among micro private sector employers accountants were the advisors mentioned most often, by seven in ten (69%) of this group. Other advisors mentioned at higher levels by this group included pension providers (44%), IFAs/brokers (43%), pension consultants/ebcs (28%) and trade/professional bodies (27%). Figure 73: Who intend to consult among medium, small and micro private sector employers (prompted) Q: Which, if any, of the following types of advisors are you likely to consult about automatic enrolment in the future? Unweighted bases in parentheses Where employers said that they had no intention to consult a professional advisor with regard to automatic enrolment (31 employers) they were asked why this was the case. Within this two fifths (41%) felt they had the expertise in-house, a fifth (21%) felt it would be easy enough to do without an advisor, one in seven (14%) that their organisation already complies, and one in ten that an advisor would be too expensive (12%), that they haven t thought about it yet (12%), or that they have already got all the information they need (12%). 93

96 Employers awareness, understanding and activity relating to workplace pension reforms, How long before due date employers intend to consult other parties Based on the number of employees currently employed in their organisation, employers were informed when they would need to comply with the new pension regulations 30. They were then asked how long before their due date they thought they would seek help or information How long before due date employers intend to consult other parties among all employers Around one in ten (8%) of all employers reported having already started seeking information on automatic enrolment. One in ten (10%) said that they would start eighteen months or more before their deadline, one in five (19%) between twelve and eighteen months before, a third (32%) between six and twelve months before, and one in seven (14%) less than six months before their deadline. However, one in seven (14%) said that they did not know how long before their due date they would seek help, or that it depended when their deadline actually was. Figure 74: How long before due date employers intend to consult other parties among all employers 50% 40% 30% 20% 10% 0% 1% 6% 3% 19% 12% 20% 7% 6% 1% 14% 8% More than three years Two to three years Eighteen months to two years Twelve to eighteen months Ten to twelve months Six to nine months Three to five months (714) One to two months Less than one month Don't know/depends Already started Q: Based on the number of employees currently employed in your organisation, you will need to comply with these new pension regulations by... Please be aware that this date is an approximate date for the purposes of this survey. How long before your due date do you think you will seek help or information? 30 They were also informed that this date was an approximate date for the purposes of the survey. Respondents in waves one and two were not informed of their likely deadline, precluding comparisons with data. 94

97 Research findings How long before due date employers intend to consult other parties among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately How long before due date employers intend to consult other parties among large employers Among all large employers over half (54%) reported having already started seeking information, although this proportion was lower among large public sector employers (43% compared to 56% of large private sector employers). Among all large employers, and large private sector employers, around one in ten (9%) said they would start over twelve months before their deadline, one in five (20% and 17% respectively) said that they would start six to twelve months before, and around one in ten (10% and 11% respectively) said that they would start less than six months before. This pattern was very similar among large public sector employers, although this group were more likely to say that they would start six to nine months before (19% compared to 8%). 95

98 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 75: How long before due date employers intend to consult other parties among all large employers, private sector large employers and public sector large employers Q: Based on the number of employees currently employed in your organisation, you will need to comply with these new pension regulations by... Please be aware that this date is an approximate date for the purposes of this survey. How long before your due date do you think you will seek help or information? Unweighted bases in parentheses How long before due date employers intend to consult other parties among medium, small and micro private sector employers A quarter (27%) of medium private sector employers said that they had already started seeking information, one in seven (15%) of small private sector employers had done so, as had one in twenty (5%) micro private sector employers. The pattern of response was similar for medium, small and micro private sector employers, and in each instance the largest proportion said that they would start between six and eighteen months before their deadline (49%, 48% and 51% respectively). 96

99 Research findings Figure 76: How long before due date employers intend to consult other parties among medium, small and micro private sector employers Q: Based on the number of employees currently employed in your organisation, you will need to comply with these new pension regulations by... Please be aware that this date is an approximate date for the purposes of this survey. How long before your due date do you think you will seek help or information? Unweighted bases in parentheses 3.16 Aspects for which employers will seek assistance from an external advisor In, employers who had not already started planning for the introduction of automatic enrolment (i.e. 79% of employers, largely composed of micro and small employers) were asked how likely their organisation would be to use an external advisor to carry out various elements of automatic enrolment on their behalf Aspects for which employers will seek assistance from an external advisor among all employers Employers were most likely to report a likelihood to use an external advisor when reviewing whether their current scheme can be used for automatic enrolment (49% certain/very likely to among those with a current scheme), to find out what they need to do to register with the appropriate government body (47%) and to choose a pension scheme (44%). 97

100 Employers awareness, understanding and activity relating to workplace pension reforms, Employers were least likely to report a likelihood to use an external advisor to communicate the changes to workers (32% certain to/very likely) and to identify eligible workers to automatically enrol (35%). Figure 77: Aspects for which employers will seek assistance from an external advisor among all employers who have not started planning Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me how likely your organisation is, if at all, to use an external advisor to carry it out on your behalf. Unweighted base = 332; * with current scheme = Aspects for which employers will seek assistance from an external advisor among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%) Aspects for which employers will seek assistance from an external advisor among large employers Given that the majority of large employers reported having already begun preparations for the introduction of automatic enrolment (private sector 82%, public sector 81%), base sizes were low in terms of large employers who had not yet begun to make preparations (private sector 35 respondents, public sector 24 respondents on an unweighted basis). Consequently results are presented below for all large employers combined. 98

101 Research findings Large employers were most likely to report that they would be certain or very likely to use an external advisor to understand what their ongoing duties are after the automatic enrolment process (35%), to understand how the legislation applies to their organisation (32%), to communicate the changes to workers (31%) and to assess the impact on their payroll system (31%). Large employers were least likely to report that they would be certain or very likely to use an external advisor to identify eligible workers (18%), to work out a timetable to implement the changes (21%), and to work out how much the pension contributions will cost (22%). Figure 78: Aspects for which employers will seek assistance from an external advisor among all large employers who have not started planning Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me how likely your organisation is, if at all, to use an external advisor to carry it out on your behalf. Unweighted base = 59; * with current pension = Aspects for which employers will seek assistance from an external advisor among medium private sector employers A third (35%) of medium private sector employers had not yet begun planning for the introduction of automatic enrolment. This group were most likely to report that they would be certain or very likely to use an external advisor to review whether their existing scheme can be used (64%), to choose a pension scheme (44%), to understand how the legislation applies to their organisation (42%), and to find out what they need to do to register with the appropriate government body (39%). 99

102 Employers awareness, understanding and activity relating to workplace pension reforms, Half or more of medium private sector employers who had not yet begun planning said they would be unlikely (not very or not at all likely) to use an external advisor to identify eligible workers (64%), to communicate the changes to workers (52%), to work out how much it will cost to implement the changes (53%), and to work out how much the pension contributions will cost (52%). Figure 79: Aspects for which employers will seek assistance from an external advisor among medium private sector employers who have not started planning Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me how likely your organisation is, if at all, to use an external advisor to carry it out on your behalf. Unweighted base = 56; * with current pension = Aspects for which employers will seek assistance from an external advisor among small private sector employers Two thirds (65%) of small private sector employers had not yet begun planning for the introduction of automatic enrolment. This group were most likely to report that they would be certain or very likely to use an external advisor to review whether their existing scheme can be used (50%), to find out what they need to do to register with the appropriate government body (50%), to work out how much the pension contributions will cost (45%) and to choose a pension scheme (44%). Small private sector employers who had not yet begun planning said they were least likely to use an external advisor to work out a timetable (35% certain to or very likely), to communicate the changes to workers (36%) and to identify eligible workers (37%). 100

103 Research findings Figure 80: Aspects for which employers will seek assistance from an external advisor among small private sector employers who have not started planning Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me how likely your organisation is, if at all, to use an external advisor to carry it out on your behalf. Unweighted base = 93; * with current pension = Aspects for which employers will seek assistance from an external advisor among micro private sector employers Over four in five (86%) of micro private sector employers had not yet begun planning for the introduction of automatic enrolment. This group were most likely to report that they would be certain or very likely to use an external advisor to find out what they need to do to register with the appropriate government body (47%), to choose a pension scheme (43%), to understand how the legislation applies to their organisation (42%), to work out how much the pension contributions will cost (41%) and to understand what their ongoing duties are after automatic enrolment (40%). Micro private sector employers who had not yet begun planning said they were least likely to use an external advisor to communicate the changes to workers (31% certain to or very likely), to work out how much it will cost to implement the changes (35%), and to identify eligible workers (36%). 101

104 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 81: Aspects for which employers will seek assistance from an external advisor among micro private sector employers who have not started planning Q: I am going to read out a list of things that need to be done to prepare for automatic enrolment, and for each one I would like you to tell me how likely your organisation is, if at all, to use an external advisor to carry it out on your behalf. Unweighted base = Willingness to pay for services All employers were asked whether their organisation would be prepared to pay a third party in addition to what they already pay to carry out the processes required for automatic enrolment on their behalf if necessary Willingness to pay for services among all employers When asked whether their organisation would be prepared to pay a third party to carry out aspects of the automatic enrolment process on their behalf if necessary, overall three in ten (28%) of all employers reported a willingness to pay. Within this, the majority (17%) said they would be prepared to pay but only if absolutely necessary, while around one in twenty (6%) expressed a willingness to pay for all elements, while a similar proportion (5%) expressed a willingness for only some elements. 31 This question was added at Autumn

105 Research findings Figure 82: Willingness to paying for services among all employers 100% 80% 64% 60% 40% 28% 20% 0% YES AT ALL 6% 5% Yes - all of them Yes - some of them 17% Yes - but only if absolutely necessary (714) 2% Expect it to be included in what I already pay for No 6% Don't know Q: Would your organisation be prepared to pay someone in addition to what you already pay to carry out the processes required for automatic enrolment on your behalf if necessary? Unweighted base in parentheses Willingness to pay for services among all private sector employers Among all private sector employers the proportion, three in ten (28%), who reported a willingness to pay at all was in line with Autumn 2011 (30%). Figure 83: Willingness to paying for services among all private sector employers over time Q: Would your organisation be prepared to pay someone in addition to what you already pay to carry out the processes required for automatic enrolment on your behalf if necessary? Unweighted bases in parentheses 103

106 Employers awareness, understanding and activity relating to workplace pension reforms, Willingness to pay for services among large employers Overall, a third (33%) of all large employers said that they would be prepared to pay a third party in addition to what they already pay to carry out the processes required for automatic enrolment on their behalf, although the majority (24%) of them said they would only if absolutely necessary. A third (36%) of large private sector employers said that they would be prepared to pay to some extent, in line with results in Spring 2011 (27%). However, large public sector organisations were less likely to report that they would be prepared to pay (13%) than large private sector organisations. Figure 84: Willingness to paying for services among all large employers, large private sector employers over time and large public sector employers Q: Would your organisation be prepared to pay someone in addition to what you already pay to carry out the processes required for automatic enrolment on your behalf if necessary? Unweighted bases in parentheses Willingness to pay for services among medium, small and micro private sector employers Results for medium, small and micro private sector employers were consistent with Autumn 2011, with a quarter (25%) of medium private sector employers saying they would be prepared to pay for services, three in ten (30%) small private sector employers, and a quarter (27%) of micro private sector employers. 104

107 Research findings Figure 85: Willingness to paying for services among medium, small and micro private sector employers over time Q: Would your organisation be prepared to pay someone in addition to what you already pay to carry out the processes required for automatic enrolment on your behalf if necessary? Unweighted bases in parentheses 3.18 Services would be prepared to pay for Those employers who did not entirely reject the possibility of paying for services (34% of all employers) were asked which elements of automatic enrolment they would be prepared to pay an advisor to manage on their organisation s behalf Services would be prepared to pay for among all employers Two fifths (41%) of all employers said that they did not know, and a fifth (20%) said they would be prepared to pay for all elements. The specific elements of automatic enrolment mentioned most often were implementing the scheme (11%), working out what the legislation means (6%), working out how much it will cost (5%) and choosing a scheme (4%). 32 This question was added at Autumn

108 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 86: Services would be prepared to pay for among all employers who would be prepared to pay 100% 80% 60% 40% 41% 20% 0% 20% All elements 11% To implement the scheme 6% 5% 4% What the legislation means How much it will cost (general) Choosing a scheme (261) 2% 2% 2% Timetable How much it will cost to implement Registration Don't know Q: Which elements of automatic enrolment would you be prepared to pay an advisor to manage on your organisation s behalf? Unweighted bases in parentheses. Mentions 2% or more Services would be prepared to pay for among all private sector employers Given that the results described above are very largely based on the responses of private sector employers, which account for over 99% of the total sample on a weighted basis, the results above were almost exactly replicated when considering private sector employers separately (the few differences that do exist do not exceed 1%). The pattern of response among all private sector employers who did not reject the possibility of paying for services was very similar to that in Autumn 2011, with the exception of a decrease in the proportion who would be prepared to pay an advisor to help in choosing a scheme (from 11% to 4%). 106

109 Research findings Figure 87: Services would be prepared to pay for among all private sector employers who would be prepared to pay over time Q: Which elements of automatic enrolment would you be prepared to pay an advisor to manage on your organisation s behalf? Unweighted bases in parentheses. Mentions 2% or more Services would be prepared to pay for among large employers Large private sector employers were most likely to mention an openness to paying for help with registration (14%), choosing a scheme (8%), all elements (8%) and implementing the scheme (7%). Large public sector employers mentioned few aspects that they would be prepared to pay for, although one in ten (10%) mentioned help in dealing with the administration, a higher proportion than large private sector employers (1%) and a similar proportion (8%) mentioned help with communicating with workers. Overall a third (36%) of all large employers said they did not know which services they would be prepared to pay for, although this figure was higher among large public sector employers (60%) than large private sector employers (33%). 107

110 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 88: Services would be prepared to pay for among all large employers, large private sector employers over time and large public sector employers who would be prepared to pay Q: Which elements of automatic enrolment would you be prepared to pay an advisor to manage on your organisation s behalf? Unweighted bases in parentheses. Mentions 2% or more Services would be prepared to pay for among medium, small and micro private sector employers Among medium private sector employers the elements mentioned most frequently were implementing the scheme (13%), understanding the legislation (12%) and all elements (10%). Among small private sector employers the elements mentioned most frequently were all elements (12%), implementing the scheme (12%), understanding the legislation (10%) and choosing a scheme (9%). Among micro private sector employers the elements mentioned most frequently were all elements (24%) and implementing the scheme (10%). Two in five of medium, small and micro private sector employers (39%, 43% and 40% respectively) said that they did not know which elements of automatic enrolment they would be prepared to pay an advisor to manage on their behalf. In each instance results were consistent with Autumn

111 Research findings Figure 89: Services would be prepared to pay for among medium, small and micro private sector employers over time Q: Which elements of automatic enrolment would you be prepared to pay an advisor to manage on your organisation s behalf? Unweighted bases in parentheses. Mentions 2% or more Confidence in meeting deadline and perceived challenges in complying with automatic enrolment Confidence in meeting deadline All employers were asked how confident they were that their organisation would have done everything it needed to by the deadline set for their organisation. Across all employer size bands, almost all employers reported feeling either very or fairly confident in this respect Confidence in meeting deadline among all employers Overall, close to nine in ten (86%) of all employers reported that they felt confident that their organisation would have done everything it needed to by the deadline set for it, including over half (55%) who reported feeling very confident this was the case. 109

112 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 90: Confidence in meeting deadline among all employers 100% 80% 60% 55% 40% 32% 20% 0% Very confident Fairly confident Not very confident 2% 1% Not at all confident (714) 9% Depends when deadline is 1% 1% Don't know Respondent does not think it applies to their organisation Q: How confident are you that your organisation will have done everything it needs to do by the deadline set for your organisation? Unweighted base in parentheses Confidence in meeting deadline among all private sector employers Among all private sector employers there has been an increase in overall levels of confidence in meeting their deadline, from 74% in waves one and two, to 86% in, driven by increases in the proportion rating themselves as very confident, from 43% in Autumn 2011 to 55% in. Figure 91: Confidence in meeting deadline among all private sector employers over time Q: How confident are you that your organisation will have done everything it needs to do by the deadline set for your organisation? Unweighted bases in parentheses 110

113 Research findings Confidence in meeting deadline among large employers Almost all (98%) large employers expressed confidence that their organisation would have done everything it needed to by the deadline set for it, including over two thirds (68%) who reported feeling very confident this was the case. Results for private sector large employers were consistent with Autumn 2011 results, with almost all (98%) expressing confidence in this respect. However this did represent an increase over Spring 2011 results where 93% expressed confidence, albeit there was a higher proportion in Spring 2011 who said that they were very confident in this respect. Results for large public sector organisations were in line with those for large private sector organisations, with 96% expressing confidence, including 68% who said that they were very confident. Figure 92: Confidence in meeting deadline among all large employers, large private sector employers over time and large public sector employers Q: How confident are you that your organisation will have done everything it needs to do by the deadline set for your organisation? Unweighted bases in parentheses Confidence in meeting deadline among medium private sector employers Almost all (96%) medium private sector employers expressed a degree of confidence, as was the case in Spring 2011 (94%) and Autumn 2011 (96%), 111

114 Employers awareness, understanding and activity relating to workplace pension reforms, including four in five (82%) who said that they were very confident. This represented an increase on Autumn 2011, where two thirds (64%) said they were very confident, which was balanced by a decrease in the proportion saying they were fairly confident (from 32% in Autumn 2011 to 15% in ) Confidence in meeting deadline among small private sector employers Small private sector employers exhibited a similar pattern of response to medium private sector employers, with the proportion (63%) saying they were very confident returning to Spring 2011 levels (67%), such that overall levels of confidence have remained stable over the three waves (86%, 83% and 89% respectively) Confidence in meeting deadline among micro private sector employers While the proportion of micro private sector employees who said that they were very confident has remained stable over the three waves, as has the proportion who said they were fairly confident, when the two responses are combined they do reveal an increase in overall levels of confidence in this respect (70%, 70% and 85% respectively). Figure 93: Confidence in meeting deadline among medium, small and micro private sector employers over time Q: How confident are you that your organisation will have done everything it needs to do by the deadline set for your organisation? Unweighted bases in parentheses 112

115 Research findings Perceived main challenges in complying Employers were asked what they thought the main challenges their organisation faced in complying with the introduction of automatic enrolment Perceived main challenges in complying among all employers Two thirds (64%) of all employers mentioned something that they saw as a challenge for their organisation, including a third (33%) who mentioned issues relating to the costs involved. Around one in ten (13%) mentioned the associated administration, and one in twenty finding the time to implement the changes (7%), understanding the legislation (5%) and getting employees to agree to take part (4%). Figure 94: Perceived main challenges in complying among all employers MENTION ANYTHING 64% Cost implications 33% Administration 13% Finding the time Understanding legislation Getting employees to agree to take part Dealing with changes to work procedures/ software Obtaining relevant information Communicating with employees 7% 5% 4% 3% 2% 2% (714) Q: What do you think are the main challenges your organisation will face in complying with the introduction of automatic enrolment? Unweighted base in parentheses. Mentions 2% or more Perceived main challenges in complying among all private sector employers The pattern of response among all private sector employers closely reflected that outlined above, although there has been a decrease in the proportion mentioning something they see as a challenge for their organisation, from 73% in Autumn 2011 to 64% in. Results were generally in line with those in Autumn and Spring 2011, although there has been an increase in the proportion mentioning the challenge of understanding the legislation (from 1% in Autumn 2011 to 5% in ), and a decrease in the proportion mentioning obtaining the relevant information (from 9% in Autumn 2011 to 2% in ). 113

116 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 95: Perceived main challenges in complying among all private sector employers Q: What do you think are the main challenges your organisation will face in complying with the introduction of automatic enrolment? Unweighted bases in parentheses. Mentions 2% or more Perceived main challenges in complying among large employers Nine in ten (89%) of all large employers mentioned something that they regarded as a challenge for their organisation, with three in ten (30%) mentioning the administration involved in complying, a fifth the cost implications (19%) and communicating with employees (17%), and around one in ten getting employees to agree to take part (10%) and dealing with opt-ins/opt-outs (8%). The pattern of response among large private sector employers largely reflected that outlined above, and this has remained largely consistent over the three waves. However there have been decreases in the proportion mentioning the organisation of a suitable pension scheme (from 7% in Autumn 2011 to 2% in ), and the issue of dealing with staff who change their minds (from 7% in Autumn 2011 to 0% in ). There has also been an increase, from 0% at Autumn 2011 to 7% in, in the proportion expressing concern over whether the business would survive the changes. Large public sector employers were less likely than large private sector employers to mention the cost implications (8% compared to 21%), concerns over the future of the organisation (0% compared to 7%), and more likely to mention finding the time to implement the changes (8% compared to 2%) and having the resources available (7% compared to 0%). 114

117 Research findings Figure 96: Perceived main challenges in complying among large employers, large private sector employers over time and large public sector employers Q: What do you think are the main challenges your organisation will face in complying with the introduction of automatic enrolment? Unweighted bases in parentheses. Mentions 2% or more Perceived main challenges in complying among medium private sector employers Four in five (81%) medium private sector employers mentioned something that they viewed as a challenge to their organisation in complying with the introduction of automatic enrolment. Within this a quarter (28%) mentioned issues relating to cost, a fifth (20%) mentioned the administrative requirements, one in seven (15%) getting employees to take part, and around one in ten (9%) communicating with employees. The pattern of results was largely consistent with Autumn 2011, although there was a decrease in the proportion who mentioned the organisation of a suitable scheme as an issue (from 8% in Autumn 2011 to 2% in ) Perceived main challenges in complying among small private sector employers Two thirds (68%) of small employers identified a challenge for their organisation, a decrease on the 80% who did so in Autumn Within this cost remained the most frequently mentioned issue, although this has declined since Autumn 2011 (from 43% to 28%). 115

118 Employers awareness, understanding and activity relating to workplace pension reforms, Around one in ten of this group also mentioned the administrative burden (12%), getting employees to take part (7%) and finding the time to deal with it (7%). The pattern of results was largely consistent with Autumn 2011, although there was a decrease in the proportion who mentioned the organisation of a suitable scheme as an issue (from 11% in Autumn 2011 to 3% in ), and obtaining the relevant information (from 9% in Autumn 2011 to 3% in ) Perceived main challenges in complying among micro private sector employers Three in five (61%) of micro private sector employers mentioned an issue, including a third (35%) who mentioned issues relating to cost, and one in ten who mentioned administration (13%) and finding the time (7%). While the pattern of results was largely consistent with Autumn 2011, there was a decrease in the proportion who mentioned obtaining the relevant information (from 10% in Autumn 2011 to 2% in ), and an increase in the proportion who mentioned understanding the legislation (from 0% in Autumn 2011 to 5% in Spring 2012). Figure 97: Perceived main challenges in complying among medium, small and micro private sector employers over time Q: What do you think are the main challenges your organisation will face in complying with the introduction of automatic enrolment? Unweighted bases in parentheses. Mentions 2% or more. 116

119 Chapter Two: Extended working life tracker, Chapter Two: Extended working life tracker, 117

120 Employers awareness, understanding and activity relating to workplace pension reforms, Table of Contents 1 Summary Introduction Key findings Background and method Background Objectives Survey methodology Research findings Employment of older workers Help for workers to continue working Enforcement of compulsory retirement ages Spontaneous awareness of changes relating to State Pension Age Spontaneous awareness of changes to employment law relating to compulsory retirement age Prompted awareness of the removal of Default Retirement Age Attitudes towards retirement age Attitudes towards older workers Differences by ethnicity Annex 1 attitudes towards retirement age by SIC Attitudes towards retirement age Attitudes towards older workers Appendix A: Profile of achieved and weighted sample Achieved sample profile Weighted sample profile Appendix B: Call outcomes

121 Summary 1 Summary 1.1 Introduction The research, carried out by BMG Research on behalf of the Department for Work and Pensions, comprised a nationally representative telephone survey of 609 private sector employers, and included 105 additional interviews with large (250 or more employees) public sector employers operating in the UK during April and May This report summarises the results from the survey, considering the private and public sector combined, and drawing comparisons between large employers in the private and public sector. It also considers differences by employer size within the private sector, making reference where relevant to the findings from a previous wave conducted between January and March 2011, comprising 751 interviews with private sector employers only. Within the private sector sample of the research, quotas were placed on employer size band, Standard Industrial Classification (SIC) within employer size band, and on region/country. Quotas were set from The Office for National Statistic s (ONS) Inter-Departmental Business Register (IDBR) 33 March 2011 statistics, but reflected the need to over-sample medium and large businesses relative to their prevalence in the population to allow for robust analysis by employer size band. Interviews were conducted via Computer Aided Telephone Interviews (CATI) with the main person responsible for making decisions about pension provision within the organisation. Among micro and small employers this was most commonly the owner or Managing Director/CEO, and among medium and large employers it was most commonly the HR Director/Manager. 1.2 Key findings Employment of older workers Two in five (43%) of all employers reported that their organisation currently employs older workers (i.e. workers who are 60 or more), ranging from 33% of micro private sector employers to almost all (98%) large employers. Three quarters (75%) of all employers reported offering some form of help to allow workers to keep working as long as they wish and are able, ranging from 71% of micro private sector employers to nine in ten small (87%) and medium (90%) private sector employers, and almost all (96%) large employers. The most commonly mentioned forms of help were offering part time work (69%) and flexible hours (62%), with close to half (45%) reporting that their organisation offers the opportunity of a change of role. 33 The Inter-Departmental Business Register (IDBR) is a list of UK businesses maintained by the Office for National Statistics (ONS) and combines the former Central Statistical Office (CSO) VAT based business register and the former Employment Department (ED) employment statistics system. It provides a common framework for business registers for statistical purposes. 119

122 Employers awareness, understanding and activity relating to workplace pension reforms, One percent of all employers reported that their organisation enforced a compulsory retirement age, and a further one in twenty (5%) that they planned to do so in future Awareness State Pension Age Three quarters (74%) of all employers reported that they were aware of changes that have been made to the age at which people can claim their State Pension, and this ranged from three quarters of micro (75%), small (72%) and medium (74%) private sector employers to nine in ten (89%) of all large employers. When probed spontaneously as to the details of the changes to the age at which people can claim their State Pension, three in five (57%) of all employers mentioned the fact that it is rising. Overall one in ten (12%) of all employers described the changes in terms of retirement age despite the fact that the changes do not require employees to retire at a particular age, and one in twenty (5%) mentioned Default Retirement Age specifically. One in ten of all employers (10%) described the changes more accurately in relation to pension age Default Retirement Age Two in five (38%) of all employers reported that they were aware of changes that have been made to employment law relating to the compulsory retirement age, ranging from 34% of micro private sector employers to 73% of all large employers. When probed spontaneously as to the details of the changes one in five (20%) of all employers mentioned that it has been removed, ranging from 16% of micro private sector employers to 57% of all large employers. Around one in twenty (7%) mentioned the fact that the age is rising (7%) and a similar proportion made reference to the retirement age more broadly (5%) rather than the compulsory, or default, retirement age specifically. When prompted three quarters (73%) of all employers said that they were aware that the law that allows employers to force their workers to retire at 65 has been removed, and this ranged from 70% of micro private sector employers to 92% of all large employers. Three in five (60%) of all employers reported that they were aware that employers who wish to make older workers retire have to be able to demonstrate that they can justify doing so in their particular circumstances, and this ranged from 56% of micro private sector employers to 87% of all large employers Attitudes Attitudes towards retirement age Nine in ten (88%) of all private sector employers agreed that employing older workers can bring skills and benefits to the business, in line with Spring 2011 (91%), with one in twenty (4%) in both instances disagreeing. 120

123 Summary Seven in ten (70%) of all private sector employers agreed that people should be able to choose to continue to work for as long as they wish, a decline on the four in five (80%) who did so in Spring 2011, although levels of disagreement with this element have remained stable over time. Two thirds (64%) of all private sector employers agreed that retaining older people saves time and money on recruitment, a statement added to the latest wave of research, while one in ten (12%) disagreed that this was the case. There has been an increase in the proportion of all private sector employers who agreed that employers should be able to retire older workers, from 36% in Spring 2011 to 42% in, with a corresponding decrease in the proportion who disagreed that this should be the case (from 42% to 34%). In contrast there has been a decrease in the proportion of all private sector employers who agreed that as people get older they are less productive in the workplace, from 26% in Spring 2011 to 20% in, with levels of disagreement remaining stable (55% and 54% respectively). The pattern of response among all employers (i.e. including large public sector employers) closely matches that described above in relation to all private sector employers. As was the case in Spring 2011, the pattern of response was largely similar by employer size Attitudes towards older workers Seven in ten (70%) of all employers agreed that their organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age, and this was consistent across all employer size bands, and across large private and large public sector employers. One in ten (9%) of all employers disagreed that this was the case. Three in five (63%) of all employers agreed that the issue of retirement is openly discussed with older workers, and again this was consistent across all employer size bands, and across large private and large public sector employers. Overall one in twenty (5%) of all employers disagreed that this was the case. 121

124 Employers awareness, understanding and activity relating to workplace pension reforms, 2 Background and method 2.1 Background This research was carried out by BMG Research on behalf of the Department for Work and Pensions. It follows another wave conducted January to March The default retirement age (DRA) was phased out from 6 April 2011 to provide people with more choice as to when to stop working. Consequently, from 6 April 2011 employers were not be able to issue any notifications of compulsory retirement using the DRA, and in cases where notifications had already been made prior to 6 April 2011 employers were only be able to continue with the retirement process as long as the employee was aged at least 65 or above before 1 October Employers are no longer able to compulsorily retire their employees, unless the retirement can be objectively justified in their particular circumstances. Such justifications can be challenged at tribunal. In addition the Government has announced its plans to bring forward an increase in State Pension age. Women s State Pension age will increase and equalise by 2018 with men s at age 65. State Pension age for men and women will then increase to age 66 by The Government also announced in November 2011 that State Pension age will now increase to 67 between 2026 and 2028, although this change is not yet law and will require the approval of Parliament. State Pension age is not a statutory retirement age. People can choose to draw their state pension and carry on working, or defer receipt of their pension to a later date that better meets their personal circumstances. 2.2 Objectives In order to explore employers understanding of the changes in employment law relating to retirement age, and extending working life initiatives, a number of questions were included in the third wave of a piece of research which considered employers awareness, understanding and activity relating to workplace pensions reform. 2.3 Survey methodology Methodology and sample The survey was a telephone survey of employers operating in the UK, with 714 interviews conducted via Computer Aided Telephone Interviewing (CATI) in April and May Interviews were conducted with the main person responsible for making decisions about pension provision within the organisation. Among micro and small employers this was most commonly the owner or Managing 34 The report of the previous wave can be found at 122

125 Background and method Director/CEO, and among medium and large employers it was most commonly the HR Director/Manager. The sample comprised 609 private sector employers and 105 large (250 or more employees) public sector employers. A previous wave, conducted between January and March 2011, comprised 751 interviews, all undertaken with private sector employers. Sample was drawn from Experian 35. The average interview length was 20 minutes Quotas and sample profile Private sector employers Within the private sector sample of the research, quotas were placed on employer size band, Standard Industrial Classification (SIC) within employer size band, and on region/country. Quotas were set from The Office for National Statistic s (ONS) Inter-Departmental Business Register (IDBR) 36 March 2011 statistics, but reflected the need to over-sample medium and large businesses relative to their prevalence in the population to allow for robust analysis by employer size band. Since a quota sampling approach rather than a random sampling approach was taken, a response rate for the survey cannot be calculated. Appendix B outlines the call outcomes, indicating the cooperation rate based on an estimation of whether the organisations contacted were in-scope for the survey. On this basis the cooperation rate was 30%. The number of private sector interviews achieved by employer size is shown in figure 1 below for each wave. Figure 1: Number of interviews completed by wave Spring 2011 (January to March 2011) (April to May to 4 employees (micro) to 49 employees (small to 249 employees (medium) employees (large Experian is a database containing 1,935,050 business records, including the self-employed, captured from a number of sources including: Companies House data; Thomson Directories; and Yell Data. 36 The Inter-Departmental Business Register (IDBR) is a list of UK businesses maintained by the Office for National Statistics (ONS) and combines the former Central Statistical Office (CSO) VAT based business register and the former Employment Department (ED) employment statistics system. It provides a common framework for business registers for statistical purposes. 123

126 Employers awareness, understanding and activity relating to workplace pension reforms, Public sector employers Unlike the research undertaken in Spring 2011, in a total of 105 interviews were also undertaken with large (250 or more employees) public sector employers. A full breakdown of the achieved sample can be found in Appendix A Weighting and presentation of data Throughout this report the results of the latest survey wave are presented including both private and public sector employers. Differences between large private and large public sector employers are also considered, as are changes over the two waves within the private sector at a total level, and by employer size band, where applicable. It is important to note that, while interviews with employers with 250 or more employees account for 37% of the achieved sample overall, and 26% of interviews achieved within the private sector, they actually account for less than 1% of the UK business population. Similarly, while interviews with the public sector account for 40% of the achieved sample within the large employer size band, they actually account for 16% of UK businesses within this size band. Using March 2011 IDBR population estimates the data have been weighted by SIC within size, and by region/country, to reflect the actual breakdown of the UK private sector business population and large employers in the public sector, so that the views of micro employers account for 73% of the weighted total sample, and the views of large employers account for less than 1% etc. Within this, large public sector employers have been weighted to represent 16% of interviews with large employers, reflecting their prevalence within this size band. While all data shown in this report are weighted, unweighted sample bases are shown to indicate the reliability of the sub-sample sizes. A full breakdown of the weighted sample profile can be found in Appendix A. Results have been presented rounded to 0 decimal places, which may mean that in the reporting some percentages may not add up to exactly 100%. For example, if there are 48.5% answering agree and 51.5% answering disagree, these figures would be rounded up to 49% and 52%, totalling 101%. This explains the instances where summary text does not match a graph or table to which it is referring. Results have also only been presented where base sizes are equal to, or more than, 30 respondents. Any questions or sub group analysis where responses are fewer than 30 have not been reported on Indicating statistically significant differences Charts and table have been used throughout this report to summarise the findings, and where statistically significant differences between sub-groups or over time occur these have been indicated by the use of the following symbol: S. Where differences are noted in this way, or in the text, they are statistically significant at the 95% level of confidence. 124

127 Research findings 3 Research findings 3.1 Employment of older workers Employers were asked whether their organisation currently employs older workers at all (i.e. workers who are 60 or more). Overall two in five (43%) reported that their organisation did, ranging from a third (33%) of micro private sector employers to almost all (98%) large employers. Figure 2: Employment of older workers among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector Employ older workers 43% 33% 65% 90% 98% 98% 98% Unweighted bases (714) (148) (150) (151) (265) (160) (105) The figure below illustrates how this varies by employer Standard Industrial Classification (SIC) where bases exceed 30, and highlights that those in the education section (75%) were more likely than those in other sectors to report employing older workers. Figure 3: Employment of older workers among all employers by employer SIC Standard Industrial Classification (SIC) Production (89) 37 52% Construction (47) 47% Wholesale and retail; repair of motor vehicles (89) 43% Accommodation & food services (35) 30% Professional, scientific & technical (75) 44% Business administration and support services (47) 37% Public admin (68) 38 24% Education (33) 75% Health (92) 41% Arts, entertainment, recreation and other services (32) 51% Unweighted bases in parentheses (where base 30) 37 The production sector includes the following sectors: mining and quarrying, manufacturing, electricity gas steam and air conditioning supply, and water supply sewage waste management and remediation activities. 38 The public administration sector is largely comprised of local authority bodies, town and parish councils, policing bodies, and other public agencies. 125

128 Employers awareness, understanding and activity relating to workplace pension reforms, 3.2 Help for workers to continue working Employers were asked whether their organisation offers a range of options to help workers to keep working as long as they wish and are able. Three quarters (75%) of all employers reported that their organisation offered some form of help to allow workers to keep working as long as they wish and are able, and this ranged from seven in ten (71%) micro private sector employers to nine in ten small (87%) and medium (90%) private sector employers. Provision of such help was reported as being almost universal among all large employers (96%). Employers most commonly reported offering part time work (69%) and flexible hours (62%), with close to half (45%) reporting that their organisation offers the opportunity of a change of role. Large public sector employers also mentioned, on a spontaneous rather than a prompted basis, the offer of flexible retirement (20%) and increased reductions in working hours (6%), aspects mentioned by low proportions of private sector employers. Figure 4: Help for workers to continue working among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector ANY 75% 71% 87% 90% 96% 96% 98% Part time work 69% 64% 82% 85% 92% 92% 94% Flexible hours 62% 58% 72% 76% 89% 88% 95% Change of role 45% 42% 51% 59% 84% 85% 81% *Flexible retirement *Increased reduction in working hours 1% 1% 0% 0% 4% 1% 20% <0.5% 0% 0% 4% 1% <0.5% 6% Unweighted bases (714) (148) (150) (151) (265) (160) (105) 126

129 Research findings The figure below considers this by employer SIC, and illustrates that those in the education, health, and arts, entertainment, recreation and other services sectors were most likely to report offering some form of help for workers to continue working for as long as they wish and are able (100% in each instance). Figure 5: Help for workers to continue working among all employers by employer size ANY Part time work Flexible hours Change of role Don t know Production (89) 72% 58% 54% 38% <0.5% Construction (47) 64% 58% 56% 41% 0% Wholesale and retail; repair of motor vehicles (89) Accommodation & food services (35) Professional, scientific & technical (75) Business administration and support services (47) Public admin (68) Education (33) 76% 73% 56% 37% <0.5% 91% 91% 86% 55% 0% 74% 68% 52% 50% 0% 65% 53% 54% 34% 68% 100% 68% 68% 67% 0% 16% 78% 97% 42% 0% Health (92) 100% 100% 97% 56% 0% Arts, entertainment, recreation 100% 87% 74% 55% 0% and other services (32) Unweighted bases in parentheses (where base 30) 3.3 Enforcement of compulsory retirement ages Prior to exploring levels of awareness of changes to the state pension age 39 and the compulsory retirement age 40 employers were asked whether their organisation enforces a compulsory retirement age, whether they plan to do so in future, or whether they neither do so currently nor plan to do so. Employers were asked to select one of these three options. One percent of all employers reported that their organisation enforced a compulsory retirement age, and this ranged from 1% of micro employers to 3% of large private sector employers and 5% of large public sector employers. In addition to the one percent who reported currently enforcing a compulsory retirement age, one in twenty (5%) of all employers reported that their organisation planned to enforce a compulsory retirement age in the future, and this proportion was consistent across micro (4%), small (5%) and medium (6%) private sector employers. In contrast less than 0.5% of all large employers reported plans to do 39 Question: Are you aware of any changes that have been made to the age at which people can claim their state pension? 40 Question: Are you aware of any changes that have been made to employment law relating to compulsory retirement age? 127

130 Employers awareness, understanding and activity relating to workplace pension reforms, so, with results among this group consistent across private and public sector employers. Figure 6: Enforcement of compulsory retirement ages among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector Enforce compulsory retirement age Plan to enforce compulsory retirement age 1% 1% 2% 3% 3% 3% 5% 5% 4% 5% 6% <0.5% <0.5% 0% Unweighted bases (714) (148) (150) (151) (265) (160) (105) Employers in the public administration sector were more likely than those in any other sector (17%) to report that their organisation currently enforces a compulsory retirement age, and those in the business administration and support services (12%), the arts, entertainment, recreation and other services (10%), and the wholesale and retail; repair of motor vehicles (9%) sectors were more likely to report plans to do so. Figure 7: Enforcement of compulsory retirement ages among all employers by employer SIC Enforce compulsory retirement age Plan to enforce compulsory retirement age Production (89) <0.5% 1% Construction (47) 0% 0% Wholesale and retail; repair of motor vehicles (89) <0.5% 9% Accommodation & food services (35) 0% 2% Professional, scientific & technical (75) 1% 2% Business administration and support services (47) 4% 12% Public admin (68) 17% 0% Education (33) 0% 0% Health (92) <0.5% 5% Arts, entertainment, recreation and other services (32) 2% 10% Unweighted bases in parentheses (where base 30) 128

131 Research findings 3.4 Spontaneous awareness of changes relating to State Pension Age Employers were asked whether they were aware of any changes that have been made to the age at which people can claim their State Pension. Three quarters (74%) of all employers reported that they were, and this ranged from approximately three quarters of micro (75%), small (72%) and medium (74%) private sector employers to nine in ten (88%) of all large employers. Within this latter group, levels of awareness were higher among public sector employers (95%) than private sector employers (87%). Figure 8: Claimed awareness of changes relating to State Pension Age among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector Claim to be aware 74% 75% 72% 74% 88% 87% 95% Unweighted bases (714) (148) (150) (151) (265) (160) (105) All employers within the education sector reported being aware of changes relating to the State Pension age, as did nine in ten (91%) of those in the health sector. Those in the business administration and support services sector were least likely to report being aware of the changes (53%). Figure 9: Claimed awareness of changes relating to State Pension Age among all employers by employer SIC Claim to be aware Production (89) 60% Construction (47) 86% Wholesale and retail; repair of motor vehicles (89) 72% Accommodation & food services (35) 71% Professional, scientific & technical (75) 78% Business administration and support services (47) 53% Public admin (68) 84% Education (33) 100% Health (92) 91% Arts, entertainment, recreation and other services (32) 76% Unweighted bases in parentheses (where base 30) 129

132 Employers awareness, understanding and activity relating to workplace pension reforms, Employers who reported being aware of changes relating to State Pension Age were then asked without prompting if they could recall the changes, and the figure overleaf illustrates the responses to this question among all employers 41. The responses provided to this question were very diverse, with respondents able to mention as many or as few aspects as they wished, and these responses have been coded up into broad themes to summarise the breadth of response. Overall, three in five (57%) of all employers mentioned the fact that it is rising. In terms of employer size, a similar proportion of micro (57%) and small (59%) private sector employers mentioned this, as did half (47%) of medium private sector employers. This proportion rose to three quarters (76%) of all large employers, and this figure was consistent across both large private (75%) and large public (80%) sector employers. Overall one in ten (12%) employers described the changes in terms of retirement age, rising to one in five (20%) of all large employers, despite the fact that the changes do not require employees to retire at a particular age. In addition, one in twenty (5%) of all employers mentioned the Default Retirement Age specifically, rising to one in five (17%) of large public sector employers. One in ten of all employers (10%) described the changes more accurately in relation to pension age, and this rose to one in five (21%) of all large public sector employers. One in ten (7%) mentioned that the changes relate to women, and one in twenty (5%) that they relate to men, with a similar proportion (4%) mentioning that the Default Retirement Age will be consistent for both men and women. One in five (21%) of all employers mentioned a specific age relating to the changes, and this was spread relatively evenly over the 65 to 70 year old age bracket, although large public sector employers were more likely than other groups to mention 65 (11%) and 68 (12%) years of age. 41 Percentages shown have been rebased to include all respondents (i.e. not only those who said they were aware of a change) to facilitate comparisons between sub-groups. 130

133 Research findings Figure 10: Spontaneous awareness of changes relating to State Pension Age among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector It is rising 57% 57% 59% 47% 76% 75% 80% Mention retirement age Mention pension age 12% 10% 17% 9% 20% 21% 14% 10% 11% 7% 8% 11% 9% 21% Mention DRA 5% 5% 5% 9% 9% 8% 17% Mention effect on women Mention effect on men 7% 7% 10% 3% 9% 8% 12% 5% 4% 8% 3% 6% 6% 6% Mention age 65 4% 5% 3% 3% 5% 4% 11% Mention age 66 4% 3% 4% 4% 5% 5% 5% Mention age 67 7% 8% 5% 7% 6% 5% 10% Mention age 68 2% 3% 0% 3% 5% 4% 12% Mention age 70 4% 3% 6% 1% 1% 1% 3% Have to work for longer 4% 4% 2% 7% 2% 1% 4% Unweighted bases (714) (148) (150) (151) (265) (160) (105) 3.5 Spontaneous awareness of changes to employment law relating to compulsory retirement age Employers were then asked whether they were aware of any changes that have been made to employment law relating to the compulsory retirement age. Two in five (38%) of all employers reported that they were, and this ranged from a third of micro private sector employers (34%) to three quarters (73%) of all large employers. Results among large employers were consistent across the private and public sector. 131

134 Employers awareness, understanding and activity relating to workplace pension reforms, Figure 11: Claimed awareness of changes to employment law relating to compulsory retirement age among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector Claim to be aware 38% 34% 45% 66% 73% 74% 68% Unweighted bases (714) (148) (150) (151) (265) (160) (105) Over nine in ten (93%) employers within the education sector reported being aware of changes that have been made to employment law relating to the compulsory retirement age, as did over half (55%) of those in the public administration sector. Those in the construction (23%) and the arts, entertainment, recreation and other services (28%) sectors were least likely to report being aware of the changes. Figure 12: Claimed awareness of changes to employment law relating to compulsory retirement age among all employers by employer SIC Claim to be aware Production (89) 44% Construction (47) 23% Wholesale and retail; repair of motor vehicles (89) 43% Accommodation & food services (35) 39% Professional, scientific & technical (75) 35% Business administration and support services (47) 36% Public admin (68) 55% Education (33) 93% Health (92) 46% Arts, entertainment, recreation and other services (32) 28% Unweighted bases in parentheses (where base 30) Employers who reported being aware of changes relating to the compulsory retirement age were then asked without prompting if they could recall the changes, and the figure overleaf illustrates the responses to this question among all employers 42. Again, the responses provided to this question were very diverse, with respondents able to mention as many or as few aspects as they wished, and these responses have been coded up into broad themes to summarise the breadth of response. 42 Percentages shown have been rebased to include all respondents (i.e. not only those who said they were aware of a change) to facilitate comparisons between sub-groups. 132

135 Research findings Overall one in five (20%) of all employers mentioned the removal of the compulsory retirement age in some way, and this rose from 16% of micro private sector employers to 57% of all large employers. Within the large employer size band, private sector employers were more likely to mention this than public sector employers (59% compared to 46%). Less than one percent mentioned DRA specifically, although this rose to one in twenty (5%) of all large employers. Around one in twenty mentioned the fact that the age is rising (7%) and a similar proportion made reference to the retirement age more broadly (5%) rather than the compulsory, or default, retirement age specifically. Figure 13: Spontaneous awareness of changes to employment law relating to compulsory retirement age among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector It has been removed 20% 16% 28% 49% 57% 59% 46% It is rising 7% 7% 7% 3% 3% 3% 4% Mention retirement age 5% 5% 3% 7% 9% 9% 10% Mention DRA <0.5% 0% <0.5% 1% 5% 5% 4% Mention effect on men Mention effect on women 2% 2% 1% 0% 0% 0% 0% 1% 1% 1% 0% <0.5% 0% 1% Mention age 65 2% 3% 1% 7% 7% 7% 6% Mention age 67 1% 1% 0% <0.5% <0.5% 0% 1% Unweighted bases (714) (148) (150) (151) (265) (160) (105) 133

136 Employers awareness, understanding and activity relating to workplace pension reforms, 3.6 Prompted awareness of the removal of Default Retirement Age Employers were asked whether they were aware that the law that allows employers to force their workers to retire at 65 has been removed. Three quarters (73%) of all employers reported that they were aware of this, which matches the levels achieved in Spring 2011 (73%), prior to the introduction of the changes. Levels of awareness increased with employer size, from 70% of micro private sector employers to 92% of all large employers, again in line with the levels achieved in Spring 2011 (69% and 91% respectively). Results among large employers were consistent across the private and public sector. Figure 14: Prompted awareness of removal of Default Retirement Age among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector Aware 73% 70% 79% 86% 92% 92% 92% Unweighted bases (714) (148) (150) (151) (265) (160) (105) Over nine in ten (95%) employers within the education sector reported being aware that the law that allows employers to force their workers to retire at 65 has been removed, as did close to nine in ten of those in the construction (88%) and health (87%) sectors. Employers in the production (60%), business administration and support services (61%) and wholesale and retail; repair of motor vehicles (62%) were least likely to report being aware of the removal of Default Retirement Age. Figure 15: Prompted awareness of removal of Default Retirement Age among all employers by employer SIC Aware Production (89) 60% Construction (47) 88% Wholesale and retail; repair of motor vehicles (89) 62% Accommodation & food services (35) 82% Professional, scientific & technical (75) 71% Business administration and support services (47) 61% Public admin (68) 65% Education (33) 95% Health (92) 87% Arts, entertainment, recreation and other services (32) 70% Unweighted bases in parentheses (where base 30) 134

137 Research findings To summarise the findings outlined above, two in five (38%) of all employers reported being aware of changes that have been made to employment law relating to the compulsory retirement age, and when probed for detail a fifth of all employers (20%) mentioned spontaneously that it has been removed. However, the proportion of all employers who reported being aware that the law that allows employers to force their workers to retire at 65 has been removed rose to three quarters (73%) following prompting. Employers were also asked whether they were aware that employers who wish to make older workers retire have to be able to demonstrate that they can justify doing so in their particular circumstances. Three in five (60%) of all employers reported that they were aware of this. While there have been changes to the wording of this question since Spring , this does represent an increase of twenty percentage points. Awareness ranged from 56% of micro private sector employers (compared to 34% in Spring 2011), to 87% of all large employers (compared to 78% in Spring 2011). Results among large employers were consistent across the private and public sector. Figure 16: Prompted awareness that employers have to justify retiring older workers among all employers by employer size Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector Aware 60% 56% 71% 86% 87% 86% 88% Unweighted bases (714) (148) (150) (151) (265) (160) (105) 43 Spring 2011 wording: Employers will not be able to make employees retire after October 2011 unless they can demonstrate that they are justified in doing so. 135

138 Employers awareness, understanding and activity relating to workplace pension reforms, Over nine in ten (96%) employers within the education sector reported that they were aware that employers who wish to make older workers retire have to be able to demonstrate that they can justify doing so in their particular circumstances, as did over nine in ten of those in the business administration and support services sector (94%). Figure 17: Prompted awareness that employers have to justify retiring older workers among all employers by employer SIC Aware Production (89) 61% Construction (47) 62% Wholesale and retail; repair of motor vehicles (89) 54% Accommodation & food services (35) 63% Professional, scientific & technical (75) 59% Business administration and support services (47) 94% Public admin (68) 72% Education (33) 96% Health (92) 70% Arts, entertainment, recreation and other services (32) 61% Unweighted bases in parentheses (where base 30) 3.7 Attitudes towards retirement age As was the case in Spring 2011, employers were asked to rate their level of agreement/disagreement with a number of statements regarding retirement agerelated issues: People should be able to choose to continue to work for as long as they wish; Employing older workers can bring skills and benefits to the business; Retaining older people saves time and money on recruitment 44 ; Employers should be able to retire older workers; As people get older they are less productive in the workplace. The figure overleaf illustrates the results among all private sector employers over time, i.e. excluding large public sector employers from the latest wave in order to provide a like-for-like comparison given that public sector employers were not included within the scope of the first wave. Nine in ten (88%) of all private sector employers agreed that employing older workers can bring skills and benefits to the business, in line with Spring 2011 (91%), with one in twenty (4%) in both instances disagreeing. 44 This statement was added at the latest wave of research. 136

139 Research findings Seven in ten (70%) agreed that people should be able to choose to continue to work for as long as they wish, a decline on the four in five (80%) who did so in Spring 2011, although levels of disagreement with this element have remained stable over time. Two thirds (64%) of all private sector employers agreed that retaining older people saves time and money on recruitment, a statement added to the latest wave of research, while one in ten (12%) disagreed that this was the case. There has been an increase in the proportion who agreed that employers should be able to retire older workers, from 36% in Spring 2011 to 42% in, with a corresponding decrease in the proportion who disagreed that this should be the case (from 42% to 34%). In contrast there has been a decrease in the proportion who agreed that as people get older they are less productive in the workplace, from 26% in Spring 2011 to 20% in, with levels of disagreement remaining stable (55% and 54% respectively). Figure 18: Attitudes towards retirement age among all private sector employers over time Agree Disagree Employing older workers can bring skills and benefits to the business % 4% % 4% People wish should be able to choose to continue to work for as long as they % 14% % S 12% Retaining older people saves time and money on recruitment % 12% Employers should be able to retire older workers % 42% % S 34% S As people get older they are less productive in the workplace % 54% % S 54% Unweighted bases 2011/2012 (751/609) The figure overleaf explores attitudes towards retirement age among all employers (i.e. including large public sector employers), among whom the response closely matches that described above in relation to all private sector employers. 137

140 Employers awareness, understanding and activity relating to workplace pension reforms, It also explores how this varies by employer size and indicates that, as was the case in Spring 2011, the pattern of response was largely similar by employer size, with the following exceptions: Medium private sector employers were more likely than other groups to disagree that people should be able choose to continue to work for as long as they wish (19%); Micro and medium private sector employers were more likely than other groups to agree that employers should be able to retire older workers (47% and 45% respectively). There have been some changes in attitudes since Spring 2011 within some size bands: Micro private sector employers were less likely to agree that people should be able to choose to continue to work for as long as they wish (69% compared to 81% in Spring 2011), although levels of disagreement on this dimension have not increased; Micro private sector employers were less likely to disagree that employers should be able to retire older workers (29% compared to 41% in Spring 2011). In contrast, large private sector employers were more likely to disagree that this should be the case (46% compared to 35% in Spring 2011); Medium private sector employers were less likely to agree that as people get older they are less productive in the workplace (10% compared to 20% in Spring 2011), with the majority (65%) continuing to disagree that this should be the case. There was little difference in the responses of large private and large public sector employers, except with regard to levels of agreement that retaining older people saves time and money on recruitment, where large private sector employers were more likely to agree than large public sector employers (69% compared to 51%). 138

141 Research findings Figure 19: Attitudes towards retirement age among all employers by employer size over time Private sector employers Large employers TOTAL Micro Small Medium All Employing older workers can bring skills and benefits to the business Private sector Public sector Agree 2011 Na 90% 94% 90% Na 91% Na Agree % 87% 90% 93% 92% 92% 91% Disagree 2011 Na 4% 3% 6% Na 4% Na Disagree % 5% 3% 2% 2% 2% <0.5% People should be able to choose to continue to work for as long as they wish Agree 2011 Na 81% 79% 74% Na 78% Na Agree % 69% S 73% 72% 72% 71% 78% Disagree 2011 Na 14% 12% 15% Na 11% Na Disagree % 13% 11% 19% 11% 11% 12% Retaining older people saves time and money on recruitment Agree % 65% 62% 65% 67% 69% 51% Disagree % 11% 15% 15% 12% 11% 15% Employers should be able to retire older workers Agree 2011 Na 37% 34% 41% Na 36% Na Agree % 47% 28% 45% 26% 28% 20% Disagree 2011 Na 41% 47% 41% Na 35% Na Disagree % 29% S 47% 33% 46% 46% S 45% As people get older they are less productive in the workplace Agree 2011 Na 27% 24% 20% Na 14% Na Agree % 23% 16% 10% S 16% 16% 18% Disagree 2011 Na 53% 59% 60% Na 70% Na Disagree % 51% 62% 65% 60% 60% 58% Unweighted bases 2011/2012 (714) (202/148) (250/150) (151/151) (265) (148/160) (105) Results by employer SIC can be found in Annex 1 of this report. 139

142 Employers awareness, understanding and activity relating to workplace pension reforms, 3.8 Attitudes towards older workers In the latest wave of research employers were asked to rate their level of agreement/disagreement with two statements regarding older workers: This organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age; The issue of retirement is discussed openly with older workers. Seven in ten (70%) of all employers agreed that their organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age, and this was consistent across all employer size bands, and across large private and large public sector employers. One in ten (9%) of all employers disagreed that this was the case. Three in five (63%) of all employers agreed that the issue of retirement is openly discussed with older workers, and again this was consistent across all employer size bands, and across large private and large public sector employers. Overall one in twenty (5%) of all employers disagreed that this was the case, although this rose to one in ten (10% to 11%) for all but micro private sector employers (3%). Figure 20: Attitudes towards older workers among all employers by employer size over time Private sector employers Large employers TOTAL Micro Small Medium All Private sector Public sector This organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age Agree 70% 69% 75% 73% 71% 70% 78% Disagree 9% 10% 8% 6% 6% 7% 4% The issue of retirement is discussed openly with older workers Agree 63% 63% 63% 65% 59% 59% 63% Disagree 5% 3% 10% 10% 11% 11% 11% Unweighted bases (714) (148) (150) (151) (265) (160) (105) Results by employer SIC can be found in Annex 1 of this report. 3.9 Differences by ethnicity There were a number of areas where differences were apparent between employers who were from BME backgrounds (45 respondents) and those from White backgrounds, and between employers where all or most of the workforce were from BME backgrounds (37 respondents) and those where some or none of the workforce were from BME backgrounds. While caution should be shown due to low base sizes, the statistically significant differences between the groups are summarised below. 140

143 Research findings Employers from BME backgrounds were more likely than employers from White backgrounds to be in the wholesale and retail/repair of motor vehicles (38%), the business administration and support services (17%) and health (15%) sectors (compared to 15%, 6% and 4% respectively). They were less likely to report being aware of changes that have been made to employment law relating to compulsory retirement age (14% compared to 39%), but equally likely to be aware once prompted (63% compared to 73%) Employers from BME backgrounds were more likely to agree that people should be able to choose to continue to work for as long as they wish (91% compared to 69%), less likely to agree that employing older workers can bring skills and benefits to the business (72% compared to 89%), more likely to agree that employers should be able to retire older workers (68% compared to 41%) and more likely to agree that as people get older they are less productive in the workplace (33% compared to 20%). They were also more likely to disagree that their organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age (19% compared to 9%). Employers where all or most of the workforce were from BME backgrounds were more likely than those where some or none of the workforce were from BME backgrounds to be in the accommodation and food services (22%) and the business administration and support services (33%) sectors and less likely to be in the professional, scientific and technical (1%) sectors (compared to 6%, 5% and 18% respectively). They were less likely to report being aware of changes that have been made to employment law relating to compulsory retirement age (14% compared to 39%), and remained less likely to be aware once prompted (34% compared to 74%). Employers where all or most of the workforce were from BME backgrounds were more likely to agree that people should be able to choose to continue to work for as long as they wish (91% compared to 70%) and more likely to agree that employing older workers can bring skills and benefits to the business (100% compared to 88%). However they were also more likely to disagree that their organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age (26% compared to 9%). 141

144 Employers awareness, understanding and activity relating to workplace pension reforms, 4 Annex 1 attitudes towards retirement age by SIC 4.1 Attitudes towards retirement age Employers were asked to rate their level of agreement/disagreement with a number of statements regarding retirement age-related issues: People should be able to choose to continue to work for as long as they wish; Employing older workers can bring skills and benefits to the business; Retaining older people saves time and money on recruitment; Employers should be able to retire older workers; As people get older they are less productive in the workplace. The figure below illustrates the responses to the first three of these statements by employer SIC where bases exceed 30, and the following figure illustrates the responses to the last two of these statements. The following summarises the key differences by employer SIC: While employers in the public administration sector were less likely to agree (50%) and more likely to disagree (33%) that people should be able to choose to continue to work for as long as they wish, all agreed that employing older workers can bring skills and benefits to the business, and four in five (81%) that retaining older people saves time and money on recruitment; While those in the health sector were less likely to agree that employing older workers can bring skills and benefits to the business (50%), they were no more likely than those in other sectors to disagree that this is the case (<0.5%); Employers in the health, and business administration and support services sectors were more likely to disagree that retaining older people saves time and money on recruitment (27% and 21%) respectively, although in both instances a higher proportion agreed than disagreed that this is the case (43% and 53% respectively); Employers in the business administration and support services sectors were also more likely to agree that employers should be able to retire older workers (57%), and less likely to disagree that this should be the case (16%); Employers in the education sector were less likely to agree that employers should be able to retire older workers (4%) and that as people get older they are less productive in the workplace (4%). They were correspondingly more likely to disagree that employers should be able to retire older workers (63%), as were those in the construction (55%) and public administration sectors (51%); Employers in the accommodation and food services, and in the education sectors were less likely to agree that as people get older they are less productive in the workplace (4% in both instances). 142

145 Annex 1 attitudes towards retirement age by SIC Figure 21: Attitudes towards retirement age among all employers by employer SIC Able to choose to continue Can bring skills and benefits Saves time and money Agree Disagree Agree Disagree Agree Disagree Production (89) 67% 10% 90% <0.5% 59% 8% Construction (47) 80% 13% 95% 5% 74% 9% Wholesale and retail; repair of motor vehicles (89) Accommodation & food services (35) Professional, scientific & technical (75) Business administration and support services (47) 73% 12% 84% 5% 63% 7% 82% 10% 94% 6% 74% 5% 64% 11% 83% 8% 72% 8% 51% 17% 98% 0% 53% 21% Public admin (68) 50% 33% 100% <0.5% 81% 1% Education (33) 94% 3% 100% 0% 73% 3% Health (92) 75% 7% 58% <0.5% 43% 27% Arts, entertainment, recreation and other services (32) 73% 12% 92% 8% 66% 16% Unweighted bases in parentheses (where base 30) Figure 22: Attitudes towards retirement age among all employers by employer SIC Employers should be able to retire older workers As people get older they are less productive Agree Disagree Agree Disagree Production (89) 38% 38% 34% 48% Construction (47) 25% 55% 18% 53% Wholesale and retail; repair of motor vehicles (89) 50% 36% 18% 60% Accommodation & food services (35) 45% 25% 4% 69% Professional, scientific & technical (75) 44% 26% 21% 46% Business administration and support services (47) 57% 16% 30% 39% Public admin (68) 46% 51% 18% 48% Education (33) 4% 63% 4% 92% Health (92) 31% 40% 12% 66% Arts, entertainment, recreation and other services (32) 47% 21% 25% 47% Unweighted bases in parentheses (where base 30) 143

146 Employers awareness, understanding and activity relating to workplace pension reforms, 4.2 Attitudes towards older workers Employers were asked to rate their level of agreement/disagreement with two statements regarding older workers: This organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age; The issue of retirement is discussed openly with older workers. The pattern of response was more similar across employer sector with regard to older workers than the retirement age, with the following exceptions: Those in the business administration and support services, the arts, entertainment, recreation and other services, and the wholesale and retail; repair of motor vehicles sectors were more likely to disagree that their organisation is as likely to employ older workers now as it was before the removal of the compulsory retirement age (26%, 22% and 18% respectively), although in each instance more agreed than disagreed that this is the case; Those in the public administration sector were less likely to agree that the issue of retirement is discussed openly with older workers (33%), and more likely to disagree that this is the case (18%); While 69% of those in the education sector agreed that the issue of retirement is discussed openly with older workers, a quarter (23%) disagreed that this is the case. Figure 23: Attitudes towards older workers among all employers by employer SIC As likely to employ older workers Issue of retirement discussed openly Agree Disagree Agree Disagree Production (89) 73% 10% 70% 4% Construction (47) 80% 3% 74% 1% Wholesale and retail; repair of motor vehicles (89) 65% 18% 68% 9% Accommodation & food services (35) 73% 9% 52% 1% Professional, scientific & technical (75) 79% 6% 64% 1% Business administration and support services (47) 40% 26% 53% 11% Public admin (68) 98% 1% 33% 18% Education (33) 96% 0% 69% 23% Health (92) 85% 6% 74% 8% Arts, entertainment, recreation and other services (32) Unweighted bases in parentheses (where base 30) 62% 22% 62% 14% 144

147 Appendix A: Profile of achieved and weighted sample Appendix A: Profile of achieved and weighted sample 4.3 Achieved sample profile Figure A1: Profile of achieved sample SIC within size Employee size band 1 to 4 5 to49 50 to TOTAL (%) (%) (%) (%) (%) A. Agriculture, forestry & fishing 7% 1% 1% 1% 2% B, C, D, E. Production/manufacturing 13% 13% 18% 9% 12% F. Construction 12% 9% 5% 3% 7% G. Wholesale and motor vehicles retail; repair of 18% 15% 11% 9% 12% H. Tr ansport & storage (inc. postal) 3% 1% 1% 5% 3% I. Acc ommodation & food services 4% 8% 7% 3% 5% J. Inf ormation & communication 5% 2% 3% 3% 3% K. Finance & insurance 3% 3% 6% 3% 3% L. Property 2% 1% 5% 3% 3% M. Professional, scientific & technical 18% 13% 12% 5% 11% N. Business administration and support services 4% 7% 8% 7% 7% O: Public admin 4% 5% 1% 20% 10% P. Education 0% 2% 3% 10% 5% Q. Health 1% 13% 16% 18% 13% R. Ar ts, entertainment, recreation and other services 6% 8% 4% 2% 4% TOTAL (nos)

148 Employers awareness, understanding and activity relating to workplace pension reforms, 4.4 Weighted sample profile Figure A2: Profile of weighted sample SIC within size Employee size band 1 to 4 5 to49 50 to TOTAL (%) (%) (%) (%) (%) A. Agriculture, forestry & fishing 4% 2% 1% *% 4% B, C, D, E. Production 6% 10% 18% 13% 7% F. Construction 15% 10% 6% 3% 13% G. Wholesale and retail; repair of motor vehicles 16% 20% 13% 10% 17% H. Transport & storage (inc. postal) 3% 3% 4% 4% 3% I. Accommodation & food services 6% 11% 7% 4% 7% J. Information & communication 8% 4% 4% 3% 7% K. Finance & insurance 2% 2% 2% 3% 2% L. Property 3% 3% 2% 2% 3% M. Professional, scientific & technical 21% 10% 8% 6% 17% N. Business administration and support services 6% 6% 10% 9% 6% O. Public admin 2% *% *% 8% 1% P. Education 0% 2% 7% 16% 1% Q. Health 2% 10% 12% 14% 4% R, S. Arts, entertainment, recreation and other services 8% 8% 5% 5% 4% UNWEIGHTED TOTAL (nos) WEIGHTED TOTAL (nos)

149 Appendix B: Call outcomes Appendix B: Call outcomes Since a quota sampling approach rather than a random sampling approach was taken, a response rate for the survey cannot be calculated. The table below outlines the call outcomes, indicating the cooperation rate based on an estimation of whether the organisations contacted were in-scope for the survey. On this basis the cooperation rate was 30%. Given that quotas by SIC and employer size were achieved, the sample can be said to be representative of the universe under investigation. Figure B: Summary of call outcomes Potentially inscope Potentially in-scope No % % of total Complete % 15% Refusal % 14% Refusal - company policy % 6% No reply/ring back % 9% Answer machine 202 9% 4% ELIGIBLE SUB-TOTAL % 48% Not in-scope Not in-scope No % Quota failure/ineligible % 41% Unobtainable number % 9% Fax number 56 2% 1% Wrong number 21 1% 0% INELIGIBLE SUB-TOTAL % 52% TOTAL ELIGIBLE AND INELIGIBLE % 147

150