The survey, which received responses from 96 companies in the FTSE 100, found 41 per cent already auto-enrol their employees into DC schemes, while a further 28 per cent intend to change the joining approach of their existing scheme as a result of the 2012 pensions reform. The position of the remaining 31 per cent is currently unclear.
The research found 90 per cent of companies have already considered the impact the forthcoming pensions reform changes will have on their businesses and employee benefit provision. But only 8 per cent believe that no changes need to be made to their current arrangements in order to comply with the new requirements, down from a quarter when the survey was conducted a year earlier.
Overall DC membership remained unchanged during the last year, with around half of all employees of FTSE 100 companies being members of a DC pension scheme. But the number of non-joiners has increased to 23 per cent from 18 per cent the previous year.
Paul Macro, senior consultant at Towers Watson says: “It is heartening to see how many companies have taken advantage of the increase in detailed information about the regulatory changes from October 2012 onwards and have considered their reaction to the introduction of auto-enrolment and minimum benefit levels.
“But it is alarming to note that almost a quarter of FTSE 100 employees choose not to, or are not eligible to join their company’s pension scheme, particularly in light of the 2012 pensions reforms and auto-enrolment legislation.
“With less than 18 months to go until the phased introduction of the requirement for companies to auto-enrol employees into a qualifying scheme, some companies will need to give serious consideration to their benefit provision. They also need to decide whether they will update their scheme design to become a qualifying scheme, use Nest or use a mixture of both all of these options could bring administrative headaches for payroll and HR teams.”