Auto-enrolment will increase the proportion of workers in occupational schemes from one in two to four in five according to research from the Chartered Institute of Personnel and Development.
The organisation surveyed 2,000 employees and found more than 62% of those not currently in a workplace pension intend to stay in after being automatically enrolled.
Its report, Labour Market Outlook: Focus on pension auto-enrolment, found that nine out of ten businesses are fully aware of the legislation and more than two thirds know their staging date.
Half of the 1,000 employers surveyed said auto-enrolment will have no impact on their business model.
Within the other half, two thirds of organisations said it would result in lower or no wage growth, 18% predicted a reduction in bonuses and overtime and 15% expected to make cuts in non-pension benefits.
CIPD rewards adviser Charles Cotton said: "Some organisations may feel forced to offset some of the additional costs by reducing wage growth or cutting other benefits, but it is important that employers examine how they can turn these costs into an investment that will bring a return to the organisation in the form of higher employee engagement."
Six out of ten employers said they have conducted reviews to ensure their pension arrangements support the legal requirements of auto-enrolment.
Just over half have checked their pension plans to ensure that they support the needs of employees as well as the business strategy, and just under half have reviewed pension arrangements to see that they support the reward strategy and the organisational culture.
At an operational level, 44% of respondents have been reviewing HR, payroll and pension administration systems while 43% have been examining the way they communicate to employees about pensions.
Cotton said: "Given that the cost of pensions is a major business outlay for most employers, it is somewhat disappointing that so few have started collecting data to assess the impact that these reforms may have."
The CIPD has teamed up with KPMG to develop a dedicated resource to provide information to employers on pensions and auto-enrolment.
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