LONDON (8 October, 2015) – Aon Employee Benefits, the UK health and benefits business of Aon plc (NYSE: AON), has warned that while there was much to celebrate as auto-enrolment passed its third birthday, challenges remain – notably the prospect of getting a further 10 million employees through the process.

By August 2015, almost 5.5 million UK employees had been automatically enrolled into a pension scheme, with The Pensions Regulator’s July 2015 report indicating that 59% of all UK employees are now active members of a pension plan. All these people have so far come from just the largest 57,904 companies – about 4% of the original number of companies forecast for the process.

Clare Abrahams, head of auto-enrolment at Aon Employee Benefits, said:
“The numbers auto-enrolled over the last three years represent a considerable achievement by UK companies. But the job is nowhere near done – there are another 10 million working people to go through the process. They are also employees of far smaller organisations than those who have already staged. For those thousands of smaller firms – the 1.8 million who have to enrol eligible staff between 2015 and 2018 – there is the extra concern that they do not have teams of specialists to call upon to help with implementation.”

Recent research from Leeds University Business School, ‘Automatic enrolment; the payroll perspective’, estimated that the average implementation time for employers is about 20 days, with the ongoing amount of time needed to sustain the scheme estimated at around three and a half days per month.

Clare Abrahams continued:
“So the challenges continue for companies both large and small. Larger firms are facing the first ‘cyclical automatic re-enrolment’, which means the first companies to auto-enrol now have to repeat their duties to ensure eligible staff are re-enrolled if they aren’t already active members of a scheme.

“As with the first time around, this could involve extensive project management. These larger employers need to assess how happy they are with the measures and providers they first put in place to deliver auto-enrolment.”

While the re-enrolment process should be less onerous than the initial one, it still requires careful planning to make certain that all relevant employee audiences are covered, that providers can support them with any new compliance requirements, and that the second Declaration of Compliance is completed by the statutory deadline.

Clare Abrahams continued:
 “Auto-enrolment will eventually become a business as usual process for payroll and HR, but to get to this point requires a lot of planning and implementation work. Systems integration between all project participants is central to future efficiencies.”

Initial success and future challenges
Clare Abrahams said:
“Three years into the process seems a fair time to ask whether it has been a success – and in my view it undoubtedly has. Auto-enrolment has been an incredibly positive movement for the millions of people who are starting to save for their retirement.

“However, there is still the key question of whether employees are getting the guidance necessary to know whether they are saving enough. Based on current figures I don’t believe that they are. Unfortunately, most people will not know the answer until they retire - which means that UK companies are in the hot seat in more ways than one to get the process right and to put their employees on the correct path.”

ENDS

Notes to editors

For more information contact letstalkbenefits@aon.co.uk.

About Aon
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and
reinsurance brokerage, and human resources solutions and outsourcing services. Through its more
than 69,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via
innovative risk and people solutions. For further information on our capabilities and to learn how we
empower results for clients, please visit: http://aon.mediaroom.com/

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