SMEs Not Ready for Workplace Pension Schemes
Almost two-thirds (65%) of the UK’s small businesses are no nearer to enrolling their staff in a workplace pension scheme required under new legislation, according to a report from the Chartered Insurance Institute (CII).
The research, conducted among 500 firms with up to 49 employees, shows that 42% have not thought about the new regulations for automatically enrolling staff in a pension scheme. In addition, nearly a quarter (23%) — though considering the regulations — have yet to take action.
Most businesses of this size (59%) know little or nothing about the pension reforms, which begin to take effect for large firms from October 2012, with only 12% claiming to know a lot about them and a mere 8% having an implementation plan in place. These low levels of knowledge and activity may explain the now extended pension reforms’ “staging dates” — from June 2015 to April 2017 — stipulated for the UK’s smallest businesses.
Currently, six out of ten firms employing fewer than 50 staff do not offer their employees a workplace pension scheme, with just 27% making a provision for both full and part-time staff. And 65% of micro businesses (1-9 staff) offer no pension scheme at all.
David Thomson, director of policy and public affairs at the CII said:
“To be fully prepared for the pension reforms, businesses need to decide what pension scheme they will offer their employees, how they will initiate and administer the scheme and how they will advise employees on pension saving.”
Under the pension reforms, all employers will be obliged to automatically enroll staff into a pension scheme, make contributions on their behalf, register with The Pensions Regulator and inform employees how the changes will affect them.
David Thomson added:
“Businesses need to embrace the concept of auto-enrolment rather than view it as another squeeze on their revenue.”
The full report is here: ADVICE NEEDED! A research report into small firms’ readiness for the workplace pension reforms.