Large employers have criticised the government, pensions industry and payroll providers for the level of support available in setting up auto-enrolment (AE).
The Department for Work and Pensions (DWP) has published qualitative research from interviews with 50 early-staging employers, who enrolled staff between September 2012 and April 2013.
It found data and systems compatibility proved a significant burden for companies in terms of both resources and costs.
The report said: "Where employers had outsourced the development of new data systems to an external provider, they often highlighted the amount of effort they had needed to put in themselves, in order to arrive at a final product.
"Some of those with the earliest staging dates complained of a lack of collaboration between pension providers, payroll providers and intermediaries in the early parts of the implementation process."
A number of respondents to the research felt they had been forced into making extraordinary efforts to ensure the roll-out of AE was successful, with limited help from other areas.
One employer in the services sector said: "There is a feeling that is shared by a number of other employers: we all feel that we have spent money in defining the rules, in defining the systems, on behalf of the next wave of employers."
Set-up costs ranged between six and seven figures for large employers, the DWP said. A retail company said it had cost "millions", which resulted in a "serious impact on the departmental budgets" of human resources (HR) and payroll.
Another employer in the retail sector said they were "cross" that the government had not demanded a greater response from payroll providers.
They said: "Our payroll provider was not interested, they said, ‘So where does it say it is a payroll problem in the legislation?' They were an absolute nightmare. They wanted to charge us nearly £1 million to create a bespoke system."
A services sector employer estimated set-up costs of £400,000, and ongoing maintenance costs of £75,000 a year.
They added: "I am quite cranky about it, because it was significantly more money than we were expecting."
In June, Whitbread confirmed that implementing AE had cost over £1m, which equated to more than its first year employer contributions.
Some employers criticised the pensions marketplace for not being ready to handle the challenges of implementation.
A leisure sector company said many of the early promises from providers did not stand up to scrutiny.
They said: "Back in 2011 and indeed in early 2012 as well, the market was not ready. There were a lot of people who were coming up with grandiose ideas.
"The whole marketplace was doing a lot of ‘yack, yack, yack' and ‘we can do this, that, and the other'. But when you tried to interrogate that a little bit more, as we found, they were talking nonsense. It was a bit disappointing."
Most employers used existing providers for AE, though some did consider low-cost solutions including National Employment Savings Trust (NEST). The main reason for rejecting NEST was the perception it is inflexible.
Contractual enrolment had the biggest impact on opt out rates among large companies. Those that signed up employees through contractual terms - and therefore had higher participation in existing schemes - saw an average opt out of 16%, compared to around 8% for other companies.
Employees aged 50 and over were also more likely to opt out, choosing to leave in the first month of membership at a rate of between 1.25 and two times the rate of workers in other age groups.
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