Auto enrolment (AE) has been implemented in large businesses since October 2012 and as part of the Department for Work and Pensions (DWP) commitment to evaluating the effects of the workplace pension reforms, they have conducted some in depth research covering the first six months of AE, explains the CIPP’s Diana Bruce.
In their initial report they state the key factor affecting actual participation levels and the impact of AE on workplace pension saving, is the number of workers who choose to opt out after being automatically enrolled, and as such this was the main focus of their study.
Recent features in the media have sported headlines along the lines of '9 out of 10 staying in after automatically enrolled' and 'opt out rates lower than expected'. This is due to one of the statistics to come out of the research, that of the 50 large employers from varying sectors and industries (between 6,000 and 120,000 employees) who participated, an average of 9% of workers opted out. Findings from previous research showed that 30% were likely to opt out, however this study was across all employer sizes, not just the largest so is not a true comparison at this stage. However the results are still very positive as across 42 of the employers who provided detailed data, it was estimated that overall participation in a workplace pension increased from 61% to 83%.
Opt out rates showed...