The Association of Consulting Actuaries (ACA) has called on the government to set out a timetable for implementing reforms to the auto-enrolment (AE) system.

It recommended parliament to increase contribution levels and reduce the minimum eligibility age in order to “maintain the momentum” on AE.

Its survey found that, if the government was to reform contribution levels in April 2021, the median acceptable level supported by employers was a minimum total AE contribution of 10 per cent of total earnings with a minimum employee contribution of 5 per cent, subject to a cap.

Larger firms supported total contributions of at least 12 per cent of earnings.

Most firms (83 per cent) said that the 2018 increase did not adversely affect scheme participation and 81 per cent said the same about the increase in 2019.

Furthermore, 82 per cent of employers supported the payment of AE contributions from the first pound of earnings, and 85 per cent supported reducing the minimum eligibility age to 18.

Commenting on the findings, ACA chair, Jenny Condron, said: “The findings show there is an appetite from employers for a gradual, but essential, increase in the default level of savings into defined contribution schemes by millions of workers.

“Without commitment from government to ensure that sums saved into AE are increased, we see little prospect that as a society, we will be able to address the fears of a growing gulf in retirement incomes from one generation to the next.

“The government needs to ‘maintain the momentum’ on AE by implementing the recommendations made and building upon them in this parliament.”

The ACA’s survey also found that the cessation rate in summer 2019, including initial opt-outs, was 6 – 10 per cent, down from 11 – 15 per cent the previous year.

However, it also revealed that there were “considerably” higher cessation rates at employers with fewer than 50 employees.

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