It’s widely acknowledged that auto enrolment minimum contributions won’t be enough to ensure a comfortable retirement for most people.
While pressure is building on the government to review contribution levels, thousands of small employers across the country are putting their hands in their own pockets to make up the shortfall.
Research NOW: Pensions recently conducted with 400 small firms revealed that the number of employers planning on contributing more than the legislative minimum for auto enrolment has nearly doubled in the past year.
Of those surveyed, nearly one in three say they plan to, or will consider, contributing more than the legislative minimum when they enrol their employees into a workplace pension. This compares to nearly one in five of SMEs surveyed last year.
Of those that intend to be more generous, 17 per cent say they plan to pay more than the minimum from the outset with a further 13 per cent stating that they will pay the minimum initially, with a view to increasing contributions over time. This is an improvement on 2014 when 8 per cent of SMEs surveyed said they intended to pay more than the minimum with a further 9 per cent stating they will pay the minimum initially with a view to increasing contributions over time.
Over half of those surveyed who intend to pay more than the minimum say they believe it will help with the recruitment and retention of employees. One in two hope that by contributing more, their employees will be encouraged to do the same.
While there is a widely held perception that large employers are more generous than small employers when it comes to pension provision, the research demonstrates that many small employers are keen to provide a pension their employees will genuinely value.
This is a wise decision as research we conducted with employees in 2013 revealed that behind holiday entitlement, the quality of the pension is the most important benefit job seekers look for.
To help those employers that want to be more generous, NOW: Pensions offers a choice of five standard auto enrolment contribution models. For more information on the options available, click here