Transport-related metaphors spring up all the time when analysts and commentators talk about business practices.

Companies, just like individuals, are on a journey of course, so it seems natural to liken corporate behaviour to a flight or drive down the motorway. You hear about boards 'taking their eye off the road' and then 'hitting the buffers' when results are poor or products fail to 'take off'

Muse Advisory, a UK-based pensions consultant, recently described the UK's preparations for the arrival of auto-enrolment as a 'train crash'.

The firm has warned that many employers are not ready to deal with the workload that auto-enrolment will bring and that they lack the necessary project management resources to comply with the new regulations. Mark Hodgkinson, Director at Muse Advisory, says that the relevant expertise needed to help carry companies through to their auto-enrolment staging dates is limited. Even companies who start to put plans in place early could suffer from auto-enrolment 'derailment' as he calls it.

Punter Southall, another consultant, recently carried out a survey on auto-enrolment and DC, which found that nearly three quarters of companies surveyed intend to undertake a pension review.

However, they need to get on with it. Less than half of respondents were able to state their correct staging date, and 55% of employers said that they were looking to maintain their current contribution structure, which does not currently meet the sufficient minimum contribution level required under the auto-enrolment regime.

The findings prompted Punter Southall's Head of DC Consulting, Alan Morahan, to accuse employers of being on 'auto-pilot'.

Encouraging signs

Despite the warning signs being flashed by consultants, there are signs that UK businesses are (continuing with the transport theme) getting on board the auto-enrolment bus.

A number of large providers have told Pension Funds Insider that trustees, and employers. are taking the reforms seriously. Apart from the implications for payroll, they have recognised that there will be a much more disparate group of people being captured in a pension scheme once auto-enrolment gets underway. This influx means that their scheme communications and investment funds will need reviewing, at the very least.

Paul Gilbody, director and head of DC consulting relationships at BlackRock, says that he and his colleagues have seen significant movement in the DC provider market, with a high number of tenders from employers who have got out of first gear and are looking for new scheme solutions.

So perhaps the picture isn't as bad as some consultants make out. Perhaps they hope to gain some new business themselves by tooting their horns rather loudly.  

mhandzel@wilmington.co.uk