Auto Enrolment was launched for big firms in a blaze of publicity two years ago,
There were television adverts announcing the arrival of AE, starring well-known businesswoman Karren Brady.
But a recent survey of 450 smaller businesses, carried out by provider NOW: Pensions, has found that 44 per cent had not given any thought to how they would find an Auto Enrolment scheme.
That is a very worrying statistic – and it isn’t the only one!
The survey also found that just two per cent of those 450 firms surveyed had secured a pension plan.
The Mail on Sunday published an article claiming that ‘a pensions crisis is brewing’.
The national newspaper stated: “A pensions crisis is brewing for small firms that have yet to plan for the Government’s Auto Enrolment scheme, with a warning many could struggle to find a provider in time.
“This year 40,000 firms with up to 249 employees will fall under rules requiring them to offer pensions to staff, starting next month.”
Recent research from the National Association of Pension Funds found that 87% of employers were concerned about the pension sector facing a ‘capacity crunch’.
Though the government-backed option, the National Employment Savings Trust (NEST), has a duty to accept firms, leaving it so close to their staging date will prevent employers from shopping around.
Firms will face a range of sanctions if they do not comply with the new regulations – with the Pensions Regulator pledging to punish ‘persistent and deliberate non-compliance’.
Andy Seed, a pensions director for accountant KPMG, told the Mail on Sunday: “If your business does not take planning seriously it may struggle to find a suitable pension supplier. If the arrangement is not set up in time this could leave you in breach of statutory requirements, while staff miss out on the intended benefits.”
Morten Nilsson, chief executive of NOW: Pensions, said: “Companies planning to rely on their existing provider are taking a gamble. Day after day we hear of firms let down at the last minute. Make sure you have alternative plans in place.”
At Lifetime we are committed to our service proposition that offers a solution to meet all of your Auto Enrolment obligations. Contact us on 01226 208600 and ask for the Pensions Department, or you can email either [email protected] or [email protected]