Half of UK employers to auto-enrol staff into company pension schemes before 2012

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Nearly half (45 per cent) of employers responding to the latest Capita Hartshead Pensions Administration Survey are likely to auto-enrol all employees into their company pension schemes ahead of 2012, the likely date for the implementation of personal accounts and auto-enrolment.

And, though Survey respondents are concentrated among larger employers, a surprising 26 per cent of employees are not members of any pension scheme offered by their employer. This means that the decisions these employers make in relation to auto-enrolment will have a nationally significant impact on the success of personal accounts as a measure to increase the numbers of people saving for retirement.

The 15^thAnnual Pensions Administration Survey, that is due to be published on 3 June, surveys schemes which have a total membership of more than six million people. This year’s Survey reveals that, as a result of the introduction of personal accounts, 53 per cent of firms said that they would review their schemes and 31 per cent of schemes were likely to revise scheme benefits.

As a means to contain these likely increases in cost, a quarter of employers said that they may auto-enrol some employees into personal accounts rather that auto-enrol all employees into the company scheme. Although it is expected this will soften the cost implications, it may cause challenges for the recruitment and retention of staff.

Commenting on the results, Mike Addenbrooke, managing director of Capita Hartshead, said: “It would seem that a significant number of schemes are thinking of moving to auto-enrol employees into personal accounts. This will of course greatly reduce the number of employees who are currently making no pension provision, which is in line with the government’s desire to increase the number of people saving for retirement. It is particularly reassuring that the Survey goes on to show that the vast majority of schemes (95 per cent) expect this shift not to have any adverse effects on their current schemes, and only five per cent said that it will lead them to close their scheme in favour of personal accounts for all employees.”

He added: “But while schemes may not be expecting any adverse effects, half of those surveyed do expect that the introduction of personal accounts will cause a review of existing company pension arrangements.”

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Media enquirers only:

For further information, please contact Caroline Mooney in Capita press office on 0207 654 2152 or 0870 2400 488 out of hours.

Notes to editors:

The fifteenth

Annual Pension Scheme Administration Survey

reportcommissioned by Capita Hartshead and undertaken by Underline Marketing and Research, is based on the responses made by 271 occupational schemes. Schemes that responded are, in the main, amongst the larger UK schemes, managing pension fund assets exceeding £222 billion with a total membership of close to 6 million lives - a significant proportion of the members presently covered by UK occupational schemes. The sample represents public and private sector schemes holding around one fifth of total UK pension fund assets and a number of large unfunded arrangements.

Non-media enquirers can request copies of the survey by emailing

jo.fearne@capita.co.uk

Capita Hartshead

is the leading provider of specialist administration, consultancy and specialist delivery solutions to the Life and Pensions industry. It provides an individually-tailored pension scheme management and administration service with a range of options including actuarial and consultancy services, scheme accounting, member communications, benefit payments and payroll, trustee training and company secretarial duties. The recent acquisitions of Higham Dunnett Shaw and Aspen have added a wide range of business solutions to this capability. Capita Hartshead also publishes an Annual Pensions Administration Survey.

Further information on Capita Hartshead can be found at:

href="http://www.capitahartshead.co.uk/">www.capitahartshead.co.uk

The Capita Group Plc

is the UK’s leading provider of integrated professional support service solutions. The Group’s service capabilities encompass customer services, financial services, human resource services, software services, systems and strategic support and property services delivered to both public sector and private organisations. With over 32,000 employees at more than 300 offices across the UK, Ireland and India, Capita is quoted on the London Stock Exchange (CPI.L), and is a constituent of the FTSE100 with revenues for 2007 of £2,073 million.

Further information on The Capita Group Plc can be found at:

http://www.capita.co.uk

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