‘Few’ members leaving schemes after contribution increases - TPR

Over 90 per cent of small and micro employers said no members asked to leave their pension scheme following the increase of minimum auto-enrolment contributions in April 2018, The Pensions Regulator has revealed.

In its Ongoing Duties Survey – Summer 2018 published today, 11 October, TPR found that just 2 per cent of micro employers had one or more members who asked to leave, while the number rose to 5 per cent for small businesses and 17 per cent for medium size businesses.

In April, pension contributions rose from 2 per cent to 5 per cent, and are set to increase again to 8 per cent in April of next year.

The cessation rate, the mean proportion of members that asked to leave the scheme, was 1.8 per cent for mirco employers, 1.7 per cent for small employers and 0.9 per cent for medium employers.

Furthermore, members who asked to remain in the scheme but not pay the increased contribution levels were also small, with just 1 per cent among micro schemes, 1 per cent of small and 2 per cent of medium employers reporting this had happened.

Four out of nine schemes were able to keep the employees’ contribution levels to below the pre-April 2018 level.

The research, which surveyed 300 micro employers, 300 small employers and 200 medium employers, was aimed at tracking employers awareness around their on-going automatic enrolment, re-enrolment duties.

Commenting on the findings, TPR director of auto-enrolment, Darren Ryder, said: “It’s great news that employers are continuing to find their ongoing duties quick and easy to do, staff are saving more and we are continuing to build on the success of automatic enrolment.”

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