Auto-enrolment easier than expected for small employers, NEST reports

Small employers who set up pensions auto-enrolment in 2015 found the process much easier than they expected, according to the national scheme provider NEST.

Research carried out for NEST into employers with 1 to 29 workers who met their auto-enrolment staging date in June 2015 revealed the group going through simpler set-ups, and meeting their duties without using their waiting period or contacting their pension scheme as much as larger employers.

Auto-enrolment is designed to ensure that every employee in the country has some form of pension provision. Most employers will have to enrol workers automatically into a workplace pension scheme that meets or exceeds certain standards, and make a minimum contribution. Staging dates for the majority of small employers begin from 2016.

The report finds that as smaller employers tend to have simpler worker set-up and payment processes than their larger counterparts, they are likely to set up with just one group of workers, and one payment source.

Whereas larger employers who staged during 2014 often used their waiting periods to postpone their duties, 2015's smaller employers were less likely to do so. They were also only half as likely to call NEST for assistance, and 27% did not call at all. For the future, most expect managing auto-enrolment to be straightforward.

Helen Dean, CEO of NEST, commented: "This insight and experience shows that small employers are navigating the auto-enrolment waters far more smoothly than anticipated. Many consider the staging of small and micro employers the next big test. While there’s been much speculation, we haven’t had hard evidence until now."

She added: "Our figures show that concerns are largely unfounded. Defying expectations, small and micro employers are rising to the challenge and meeting auto enrolment head-on." 

NEST has a public service obligation to accept any employer, whatever their size, who wants to use the scheme to meet their duties. Run as a trust-based scheme, it is designed around the needs of people who are largely new to pension saving, with low charges and easy online tools.