The obsession with auto-enrolment opt-out rates
Benefex CEO and Founder, Matt Waller, looks behind the headlines.
Not a day goes by where there isn’t another large employer announcing their auto-enrolment opt-out rates. All good, headline-grabbing stuff - but does it tell the full story?
Opt out rates versus membership rates
Having looked at a number of them in more detail I am not sure that it does. We seem to have gotten ourselves into a obsessed position of focusing on just opt-out rates of Eligible Job Holders, rather than on pension membership as a whole.
When we see Co-op and ASDA reporting low opt-out rates, the articles seem to neglect the fact that they are bound to have very significant populations of non-eligible and entitled workers. In terms of plugging the long-term savings gap this only goes part way.
Don’t get me wrong, celebrating the success of auto-enrolment is a good thing, but we still need to focus on the full picture to solve the issue.
We all know that the minimums are not enough to provide for most people in retirement. What will be interesting is to see if the auto-enrolment opt-out rates remain consistent as we reach the threshold increase dates. Will employees be as happy to pay 5% from their salary automatically? We will have to wait and see.
For more information on auto-enrolment and how it affects your organisation and employees email email@example.com or call 0844 963 0023.