“But it’s still early days and we need to keep the momentum going. Employers need to understand that their role doesn’t end once they’ve staged. They have an ongoing responsibility to continually assess, communicate and monitor the member activity and trends within their scheme. Monitoring the opt-out rate may not give the whole picture. It’s possible that people may stop making contributions once the month-long opt-out window ends. It may take a few months for individuals to decide, for whatever reason, that pensions aren’t for them. We need to monitor this to see if it becomes an upward trend as the auto-enrolment programme moves on to the UK’s smallest employers in the next few years. 

“The new retirement flexibilities should give individuals an incentive to keep on saving and benefit from their employer’s contribution. From next April, those individuals with smaller pension pots shouldn’t feel they are forced down the annuity option; instead they will be able to take their pension funds exactly as they wish.   

“Due to the change from PAYE scheme size to PAYE reference number in June 2015 and based on our experience with larger employers, transparency of staging dates for smaller employers is an issue for the industry. We’re worried that smaller employers, possibly due to a lack of engagement as highlighted in The Pensions Regulator’s recent research, won’t be aware of their staging dates. Despite best efforts, some providers won’t be able to get full details of scheme staging dates which is also key to ensuring schemes are DWP charging compliant from April 2015. The pension industry will be much better placed to help smaller employers to meet their auto-enrolment duties on time if they have access to this information. The regulators, government and the pension industry must work together to find a workable solution to avoid derailing the auto-enrolment programme.

“The next stage of the auto-enrolment story is to encourage higher contributions. Individuals will need to contribute much more than the minimum 8% statutory contribution if they are going to achieve an adequate income in retirement and take advantage of the full options open to them.

“The pension industry, government and regulators need to work together to make sure that automatic enrolment is a success and to understand what works and what doesn’t. The 2017 review of auto-enrolment is already scheduled to take place – this is the ideal time to consider what more needs to be done. This could include increasing the minimum statutory contribution from 8% and considering the tricky question of compulsion.”