Life Beyond Auto Enrolment – Opportunities and Challenges
Written by: Mark Miller
As many employers breathe a huge sigh of relief that their auto enrolment duties have been understood and implemented, now is a good time to take a look at what the future may hold.
There are a number of key points that need to be considered:
- With mandatory increases in minimum contribution levels due in April 2018 and 2019, thought needs to be given to how, and importantly when, this will be communicated to employees.
- For many employers the initial level of engagement, especially from the younger employees, was more positive than they thought it would be. For this to be maintained and built upon, ongoing communications are extremely important. It must be remembered that auto enrolment was not just about meeting a regulatory requirement but was also, importantly, creating a framework for employees to start or review their retirement savings plans.
- In our experience, for those employers who embraced the challenge of auto enrolment in a positive way, it provided an opportunity to engage with employees and encourage them to see it as a benefit and not just a cost.
The implementation of auto enrolment has either refreshed or introduced positive employee engagement for many employers but, to maintain this, continuous engagement needs to be considered. Don’t let all that good work wither on the vine.
So, what should be considered next?
Increasing an employee’s salary to reward their loyalty and retain their services, will only ever be a short term solution. Employer’s need to investigate what “non-cash” benefits would attract and retain employees. With differing generational and salary demographics it can be difficult for the employer to create an affordable solution that is of interest to all employees. Avoiding the “one size fits all” approach must be a priority.
The encouraging news is that for employers of all sizes this is achievable. Considering the introduction of core and voluntary benefits enables the employee to select benefits that suit their lifestyle and budget. Below is a table of benefits and the response from employees as to what they would select, given three choices (excluding pensions):
|Private Medical Insurance||48.1%|
|Health Cash Plans||14.5%|
|None of the above||21.3%|
(Source: Elipse Survey 2017, conducted among 1,005 employees of SMEs)
Interestingly, 57% of employers over estimate the cost of providing Life Assurance for employees (Elipse Research Report March 2017). This is a low cost/high value benefit for employers to consider.
The introduction of additional employee benefits not only provides the employer with a cost effective way of rewarding employees, they can also significantly help the employee with possible health and financial wellbeing issues. This leads to better productivity and improved absenteeism.
Helm Godfrey has a strong consultancy, technical and support team to help employers create and implement an appropriate employee benefits strategy. In addition we have our own benefits platform iCHOOSE to help promote and administer an employer’s benefits programme. Many SMEs do not have the internal resources to create, manage and review a solution that’s right for them. Helm Godfrey can provide all the support required.
The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Occupational pension schemes are regulated by The Pensions Regulator.