Auto-Enrolment adds to corporate liability risks

PSHPC Director, John Dean

Punter Southall Health & Protection Consulting (PSHPC), has warned that today’s (1 May) staging date for auto-enrolment will see yet more employers facing increased un-insured liability risks.

PSHPC Director, John Dean, argues that this latest auto-enrolment milestone, when staff in organisations with 4,100 - 5,999 employees will be automatically enrolled into a company pension, will bring more people into a system that links group risk and pensions when it should not.

“We estimate that companies with more than 500 staff in the UK are already carrying approximately £9.36 million of un-insured liability, and auto-enrolment is just adding to the problem,” he said.

“Auto enrolment means millions of employees will start to be defined as pension scheme members, with all the group risk entitlement this theoretically brings. Added to this is the fact that any opt-outs and re-opt-ins will create a constant flow of people leaving and then rejoining the company pension scheme, causing huge data concerns.

“Employers will suddenly find themselves with a large percentage of extra staff needing cover that insurers may not be aware of as most of them only take data from employers once a year, and even then most employers are unknowingly providing them with inadequate information.”

The warning comes following PSHPC’s recent launch of Gladis - a super-intelligent, self-serve platform that reduces the employer risk of managing protection insurances for employees.

Gladis is an HR support system that picks up on whether employees have opted out, or have rejoined the company pension scheme every month, giving employers a much more accurate view of their group risk cover and liabilities. Gladis knows if employees are correctly insured or not by identifying possible member eligibility issues and helps manage the huge data problems auto-enrolment creates.