Employers are being too optimistic about the time it takes to prepare for auto-enrolment, with nearly one-third of firms hoping to prepare in less than three months, research shows.
A study published today by The Pensions Regulator (TPR) and Department for Work and Pensions (DWP) shows 28% of large private sector employers think auto-enrolment preparations will take less than 12 weeks.
A fifth of large public sector employers suggest it will take less than a fortnight.
The findings are at odds with the regulator's estimates, which suggest it takes large businesses around 18 months to prepare for auto-enrolment duties.
TPR employer compliance executive director Charles Counsell said: "Based on what we have seen so far, we estimate that it will take the average large business about 18 months to plan and get ready, including making the necessary adjustments to processes and systems like payroll, HR and pensions. Leaving it as late as possible runs the risk of making preparations more costly and complex.
"We are writing to all large employers at the 18 months-to-go mark. Businesses with staging dates in the next 12 months should already have in place a detailed plan of action, including proposals for assessing their current pension scheme for automatic enrolment or, if necessary, considering whether they'll be setting up a new scheme."
The survey found 98% of large businesses with staging dates between this October and February 2014 were confident that they would be ready on time, with 82% having taken steps to prepare.
But half of employers said they would leave it as late as possible before thinking about getting ready for automatic enrolment.
"All employers will hear from us at least a year before their staging date, so there is no excuse for not knowing when these duties take effect," Counsell (pictured) said.
He added: "We are providing the support that employers will need to play their part in making workplace pensions reform a success for millions of UK workers, via online tools, detailed guidance and a checklist for selecting an appropriate pension scheme."
Follows McVey's resignation
Schroders and Aviva Investors
LightTower Partners, Seneca Partners and Unicorn AM
Integration with Money Dashboard
View from the front row