Are you interested in why employers end up with the workplace pension into which they pay their and their staff’s money?
Do you want to know more about how they value that pension and why they consider switching pensions?
Then you should read chapter 7 of the DWP employer survey 2022 (updated Sept 2023)
What is going on?
The Department for Work and Pensions (DWP) commissioned IFF Research to
conduct the 2022 Employer Survey. This report presents findings from the survey,
conducted with 8,002 employers in Great Britain.
The aim of the survey was to understand employer attitudes and behaviour in relation to a range of topics of interest to DWP, including recruitment, retention, progression, pensions, specific groups who may be disadvantaged in the labour market, health and disability at work, and employer engagement with DWP.
Fieldwork was carried out between 8 February and 6 April 2022.
Chapter 7 is the section on pensions
Here are the real answers to proper questions!
What type of pension do you offer your staff?
- When asked what pension schemes they offer, four in ten (42%) employers said they
offered a Defined Contribution pension scheme (money purchase scheme) to new
- Very few (4%) offered a Defined Benefit pension scheme.
- Around one in five (18%) employers said they do not offer any pension scheme to new
employees and three in ten (30%) didn’t know
- For employers who reported offering a pension scheme, nearly nine in ten (87%) offered a Defined Contribution scheme.
Why did you make that choice?
- Employers mentioned a range of factors they take into consideration when choosing
a pension provider for their employees.
- The most common factor is the ease or convenience of the provider or scheme(s) (48%)
- followed by advice from a professional body, colleagues or fellow employers (44%)
- and then the fees or costs on the employer (36%)
- and the value for members/employees of the provider or scheme(s) (36%).
- However, nearly one in five (18%) didn’t know.
Have you ever switched pension providers?
- When asked about switching pension provider, over three in four employers (77%) said they hadn’t switched pension provider or thought about switching.
- while almost one in ten (9%) had switched or thought about switching.
Why did you switch?
- Employers who had switched pension provider cited a range of reasons for this
- the most common were advice from a professional body, colleagues or fellow employers (36%)
- value for members/employees (35%)
- value for money for the employer (33%)
- and the fees or costs on the employer (31%).
Do you Auto-enrol ineligible staff?
Under the Pensions Act 2008 every employer in the UK must put certain staff into a
workplace pension scheme and contribute toward it. This is called automatic
enrolment. The survey asked employers whether, in the last year, they had
automatically enrolled employees who fall outside of the automatic enrolment
legislation criteria. These employees are those aged 18-21 years, earning less than
£10,000 a year, and aged above State Pension Age.
Most employers had not automatically enrolled workers in these groups: 15 per cent
of employers had automatically enrolled staff aged 18-21, 13 per cent of employers
had automatically enrolled staff earning less than £10,000 a year, and 7 per cent of
employers had automatically enrolled workers aged above State Pension Age.
What do you talk to your staff about?
Employers were asked what information or guidance they provide for their employees
on State Pension entitlement, workplace pensions / Automatic-Enrolment, and
retirement income planning. A majority (68%) of employers said they provide their
employees with information or guidance on workplace pensions / Automatic Enrolment. Around a third (35%) of employers said they provide information and
guidance on State Pension entitlement, while fewer (15%) said they provide
information or guidance on retirement income planning for their staff.
How do you talk to your staff about pensions?
Employers who said they do provide information or guidance for their employees
were then asked in what ways they have offered this advice to their staff. The most
common was by email (40%), followed by referrals to external organisations (28%),
and courses or workshops (17%). Just over a quarter (27%) of employers didn’t know
how this information is provided to their employees.