Ceridian UK auto-enrolment update: initial experience of opt-out rates from 4% to 15%
Ceridian UK, one of the UK’s leading HCM technology and service providers, is now supporting all of its major customers who stage for pensions in 2013, to ensure auto-enrolment compliance. Many of those early-staging customers have chosen Ceridian’s own auto-enrolment solution.
David Woodward, chief product and innovation officer at Ceridian UK, said:
Currently, we are on plan with our solutions supporting over half a million employees at 75 different organisations with our off-the-shelf Auto-Enrolment system. We are supporting all our major clients in one way or another. Our planning and support is now assisting customers staging in 2014 and 2015 also, as employers are becoming more aware of the need to plan and decide on their way forward early.
The organisations we support currently range in size from the smallest employing 113 employees to the largest employing over 175,000.
The beauty of the Ceridian off-the-shelf integrated solution is that auto-enrolment determination takes place at the moment pay is calculated and covers everything from employee communication to managing the postponement periods and handling refunds in the payroll if an employee opts out. The module minimises expensive interface obstacles and automatically ensures data accuracy, eases communication and administration processes and ensures total compliance with the pension reform legislation.
Commenting on early experience of opt-out rates, David Woodward adds:
Many of our clients are still in a period of postponement, so more detail on opt-out rates won’t be known until after the end of June. However, our experience is that lower than anticipated opt-out rates are also being seen with our customers – ASDA, as an example, has seen rates around eight per cent. The lowest rate among our customers is as low as four per cent, and we have seen up to 15 per cent in others. The ASDA experience seems a low opt-out, as a result of strong engagement and communications with employees across their business.
This is however an area to watch, Woodward adds:
There are a couple of key triggers that may change the shape of continued employee membership in Workplace savings. Opt-outs are focused only on the first 30 days after enrolment, which might not be long enough for employees to register a regular deduction from pay – it may be that leaving rates two or three months after the opt-out window has closed will show a rise in scheme leavers. Secondly, and particularly for employees in lower paid roles, the trigger point to leave might be when they see their first annual pensions statement and realise that the value fund they have accrued is less substantial than envisaged.