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DWP says employers support pension auto-enrolment


Most employers in the UK support proposals to have staff automatically enrolled into a workplace pension scheme, the Department of Work and Pensions has claimed (DWP).

A DWP survey of 2,550 employers in the private sector found that over half (56%) are in favour of the government's plans to encourage more people to save via presumed consent, reports People Management. Under proposals due to come into effect in 2012, employers will be required to ensure that their payroll administration departments or external payroll service providers have enrolled workers aged over 22 into a workplace pension scheme - unless the worker opts out.

The government hopes that this will help people avoid a "penny-pinching retirement". Current estimates indicate that seven million people are currently not saving enough to deliver the pension income they want in retirement, whilst the levels of employees saving into a private sector occupational pension has dropped by 2.5m since 1995.

"With around half of employees saving into a workplace pension, our planned reforms are needed to prevent millions of Britons facing a penny-pinching retirement," said Lord David Freud, DWP Minister.

Despite the seemingly positive reception from employers to the proposals, according to a report in Personnel Today the reaction is less welcome than the DWP claims. Whilst a majority do support the planned workplace pension reforms, this proportion has fallen since 2007 when 64% of employers supported the idea of automatic enrolment. Furthermore, the number of employers opposed to the idea has increased from 26% to 37% in the same period.

These levels of support may change dramatically later in the year though, when an independent review of how the proposals will be implemented will report back to the government.

"We will work with businesses and the industry to make automatic enrolment work, so we can give millions more people the chance to save," said Lord Freud. The independent review is expected in late autumn.