Nine out of 10 (90%) employees of small and medium-sized enterprises (SMEs) say their employer had not encouraged them to increase their workplace pension contributions, a new survey has found.
Howden Employee Benefits & Wellbeing revealed the statistic in a study called SME Workplace Pensions and Benefits Research Report, released to mark Pensions Awareness Week (11-15 September).
The research, which involved 500 SME employers and 500 SME employees, also found that more than half (56%) of SMEs had not assessed the appropriateness of their default pension fund for all employees.
In addition, 24% of employers admitted to never reviewing their pension scheme’s continued value for money, with a further 28% only conducting such reviews sporadically.
Commenting on the findings, Mark Fosh, executive director SME at Howden Employee Benefits & Wellbeing, said: “As financial stress continues to rise, many employers are taking steps to look after employees’ financial wellbeing, including providing them with better workplace pensions. However, SMEs may be missing a trick in terms of making the most out of pension opportunities for their business, employees and potential new hires.”
According to Fosh, common mistakes include failing to encourage employees to increase their pension contributions, not educating them about salary sacrifice or promoting the scheme to attract new talent.
“Salary sacrifice schemes can be an effective way for employers to help encourage pension saving and support their employees’ retirement planning by redirecting some or all their National Insurance (NI) savings into their employees’ pension pots – and it doesn’t have to be complicated,” Fosh added.
The survey also revealed that 50% of SME employees value their workplace pension above all other benefits, with 48% of SME employers recognising they come first for their employees. Despite this, 42% of SMEs failed to incorporate workplace pension promotion into their recruitment process.
“Employers who offer good quality workplace pension schemes should be boasting about them, as well as ensuring the scheme is well governed and compliant,” Fosh said. “This includes re-enrolling employees and communicating all the benefits of the scheme, as well as explaining the various salary sacrifice options.”