Member Article

Small businesses need to be ready for pensions

Small businesses are being advised to prepare themselves for pensions auto-enrolment says ACCA (the Association of Chartered Certified Accountants). Figures show that there are 5.2million companies across the country that are classed as being a small or medium sized business.

The government reaffirmed their commitment to auto-enrolment (AE) in the June 2010 budget. The rollout has been phased so that larger companies were required to bring the scheme earlier, this started in 2012. Throughout 2015 the scheme will be extended to cover smaller businesses. Official figures from the Pensions Regulator show that during the final three months of 2014, 1,139 compliance notices and 166 fixed penalty notices (£400 each) were issued to businesses across the UK in relation to AE.

Key dates:

1 April 2015 – companies with 50-53 workers required to begin AE

1 August 2015 – companies with 40-49 workers required to begin AE

1 October 2015 – companies with 30-39 workers required to being AE

Glenn Collins head of technical advisory ACCA UK said: “ACCA has been working with The Pensions Regulator and the Department of Work and Pensions (DWP) to help them iron out the kinks in the system to try and make the transition as smooth as possible for small companies. We have always argued that the government should ‘think small first’ when it comes to changes in business regulation and the fact the government has used a phased approach to AE shows that they are heeding our message.

“Workplace pensions have been declining in numbers for decades but it is hugely important that employees think as early as possible about saving for their retirement. Our own research has shown that the majority of ACCA members in practice are ready to help employees who want more information about AE.

“One of the biggest challenge that small businesses will face is finding a pension provider who can meet their needs at a price that is reasonable for both the provider and the business. Pension providers will need to be flexible in their offering to small businesses to make the system work for all.”

AE is a statutory requirement and employers can face a fine from the regulator is they fail to offer a compliant scheme by their start date. Companies with fewer than 30 employees will have starting dates between 2015 and 2017.

This was posted in Bdaily's Members' News section by ACCA .