Public sector lagging on auto-enrolment preparations

Despite warnings it will take at least a year, nearly half (46%) of public sector employers have not started readying themselves at all, with some at least three months behind schedule, according to KPMG research.

Auto-enrolment specialists have described the situation as “seriously concerning”, and predict numerous public sector employers could be slapped with non-compliance fines of up to £10,000 a day by the Pensions Regulator. A lack of foresight is to blame, they say.

Steve Simkins, partner at KMPG, said schemes assuming they are “almost” complying with the rules are making a mistake.

He added: “This is due to a belief on the part of most public sector employers that they are operating within the spirit of the rules, but it is an error to assume the status quo will suffice, as the regulations are very prescriptive, going beyond the scope of existing processes.”

And Tom Barton, senior associate at Pinsent Masons, said the relaxed public sector attitude is in keeping with the way employers generally view auto-enrolment – which he puts down to the “grey areas” still remaining in auto-enrolment legislation.

“They have much more to do than they realise,” he said.

The KPMG survey also found nearly nine out of 10 HR managers in the sector (87%) think preparing for and complying with the new legislation will have a moderate to significant impact on their communications.

Additionally, 86% foresee a financial impact and 84% expect extra demands to be placed on their systems.