December 10, 2013, by Kelly Cookson
Pension auto-enrolment for SMEs
One year after pension auto-enrolment came into effect for Britain’s largest companies, smaller businesses will soon also have to join the system, which requires employees to enrol all their staff in a company pension scheme unless people have specifically opted out.
In the November 2013 Business Barometer survey, UK SMEs and business advisers were asked for their views on auto-enrolment.
The responses from UK SMEs were as follows:
|Are you aware of your obligations in respect of pension auto-enrolment for staff?|
|Has your business already implemented pension auto-enrolment for staff?|
One Barometer panellist commented: “Although there has been some advertising I don’t believe many companies are aware of their obligations and the extensive fines for non compliance.”
Another said: “Pension auto-enrolment is a difficult regulatory burden for small business, and potentially stifles innovation. Adequate state pension provision is the way to avoid this being a problem for small businesses. I’m very sceptical of pension benefits to staff with many schemes expensive to administer and of doubtful benefit. Larger businesses enjoy economies of scale in administering pension schemes which are just not there for smaller employers.”
UK business advisers were also asked about auto-enrolment:
|How many of the businesses that you advise are aware of their obligations in respect of pension auto-enrolment for staff?|
|More than half||16.8%|
|Less than half||38.9%|
|How many of the businesses that you advise have already implemented pension auto-enrolment for staff?|
|More than half||8.4%|
|Less than half||32.6%|
|In your experience, how are SMEs finding the process of sourcing a pension provider prepared to offer a scheme to their staff?|
One adviser panellist commented: “Some people, including me, believe the planned date for micro businesses will be postponed again and so are ignoring it. Personally I believe that micro businesses should be and will be exempt and that the date for those with 10 to 49 employees will be delayed until 2020. There is simply too much bureaucracy and I think funding will be organised through NI or an increase in general taxation.”
The Haydn Green Institute for Innovation and Entrepreneurship runs two online UK business surveys: UK Business Barometer (UKBB) and UK Business Adviser Barometer (UKBAB). The results of the surveys are instantly processed and posted on their respective websites.
More information about the UKBB and the UKBAB can be found on the web at www.ukbb.ac and www.ukbab.ac Businesses and advisers wishing to contribute as panellists on the project can register via the websites.