No pay rises due to pensions costs, says report
Nearly one in five (18%) employers believe that automatic enrolment for pensions will mean reduced salaries or no pay rises in the future, according to a new report.
The Chartered Institute of Payroll Professionals (CIPP) investigates the position of the industry since employer automatic enrolment duties came into effect in October 2012.
In a poll of 95 participants, from a wide range of sectors, key findings indicated that more than 70% of employers have assessed the financial implications of automatic enrolment on their business, which is a 10% increase from last year's figure.
Of these, 41% believe there will be little or no impact, which is an increase of 6% from 2012 and is again mainly due to an already high pension scheme participation level.
There is a slight increase from 15% in 2012 to 18% in 2013 of respondents who believe that the impact will mean reduced or no pay rises for their workforce in the foreseeable future
There is a 5% increase from 1% in 2012 to 6% in 2013 for those who said they would be potentially looking to reduce their workforce, which is noteworthy when considering the decrease in the number of people who responded this year compared to last year
No respondent said they would need to cease trading in 2013 compared to 1% in 2012.
Some 76% of respondents in 2013 compared to 68% in 2012 felt that it would have been administratively less burdensome had the UK followed the Australian model of compulsory contribution with no opt-out facility.
Unlike the 2012 results where a third of respondents stated they had not heard of the pensions automatic enrolment legislation, all respondents involved in the 2013 survey have.