Employers face a “huge challenge” to inform staff about the impact of looming pensions reforms set for 2012, particularly as employees don’t fully undersatnd about contributions they may already be paying, CIPD research has revealed.

According to the CIPD’s Employee Outlook: Focus on Pensions, more than half of employees are not saving enough for retirement as 2012 auto-enrolment pension changes draw nearer.

The research, which surveyed 2,000 workers, found that 56 per cent worry that they are not saving enough for their retirement, while 54 per cent are not members of a workplace pension. A massive 65 per cent are not saving into a company pension scheme, compared to 40 per cent and 12 per cent in the voluntary and the public sector respectively.

Quoted in peoplemanagement.co.uk, Charles Cotton, CIPD reward adviser, said: “Firms are facing a huge challenge in light of 2012 auto-enrolment. It is crucial that the government supports employers’ efforts to communicate to employees the implications of these changes. If not, we will continue to sleepwalk into a pensions’ crisis.

“There is a real danger that, without government support, 2012 auto-enrolment will prove to be a missed opportunity in achieving a step change in the uptake of pensions.”

Further results showed that among private-sector employees who belong to a company pension, about a fifth (18 per cent) don’t know how much their employer is contributing on their behalf. This percentage is higher in the public sector, where 59 per cent are unaware of their employer’s contribution, compared to 27 per cent in the voluntary sector.

“In the public sector, where pension membership is already high, the challenge for employers is to communicate to employees how much they are contributing to these schemes,” Cotton added.

From April 2012 public-sector employees will find their own contributions increasing by an average of 3 per cent, as announced in the comprehensive spending review, he explained. If public-sector staff recognise and value the contribution their employer makes to their pensions, they may be more prepared to see their own contributions rise at a time of pay freezes and increasing living costs, he said.

Among those not in a scheme, affordability concerns were an issue, especially against a backdrop of rising prices and falling living standards. The survey does, however, indicate that some employees may be able to overcome these worries if their contribution rates are gradually phased in over time.