Two-fifths (41%) of employers want the pensions auto-enrolment duty to be changed so that workers can opt out in advance of its introduction, a survey has found.
Research carried out by law firm Eversheds found that allowing employees to opt out before they are auto-enrolled into a workplace pension was the top change that employers would like to make to the current provisions.
This was followed by the desire to remove the earnings threshold from the eligibility criteria so that employers would not have to continually monitor workers’ earnings. This was identified by 20% of respondents.
The largest UK employers will begin auto-enrolment from 1 October and, according to estimates from the Department for Work and Pensions, around 380,000 workers will be signed up to a workplace pension through the scheme in October alone.
However, the staging date for each employer depends on the size of their workforce, with the smallest employers not due to begin auto-enrolment until 2017.
Teresa Dolan, partner at Eversheds, said: “While the Government’s aim with the introduction of automatic enrolment is to encourage more people to save for their retirement, there will be an inevitable source of friction in workplaces when employers explain to eligible workers that they cannot opt out in advance of being automatically enrolled.
“As a result, an employer will still need to enrol such workers even if they have previously asked not to join a pension scheme, leading to possible complaints from workers.”
Dolan added that when an eligible worker opts out, they will need to be re-enrolled into a qualifying pension scheme every three years, whether or not they continue to object.
The survey of 245 employers also found that 28% thought that dealing with opt-ins and opt-outs would be the biggest challenge associated with pensions auto-enrolment.
However, 93% of respondents said that they were confident that they would be ready for automatic enrolment by their staging date.