Member Article

SMEs must prepare now for pension auto-enrolment

The law on workplace pensions has changed to make it easier for millions more people to build up a pension, particularly those on lower incomes. Since October 2012, automatic enrolment legislation has been rolled out to help workers save more for their retirement.

Rather than having to actively choose to join a pension scheme, employees will be put into a scheme by their employer as a matter of course, unless they pro-actively choose to opt out.

To make the process easier for businesses, staging dates have been put in place to ensure that companies will be compliant with the new workplace pension regulations which will see them have to automatically enrol all staff who are:

• Aged 22 to state pension age
• Work in the UK
• Earn over £10,000 a year

For the 1.2 million SMEs in the UK, the task of preparing for new automatic pension enrolment duties will be no small undertaking.

However, research has suggested that many SMEs with between don’t know who to turn to for support in helping them to meet their staging date. Almost a quarter of small companies look set to miss their preparations, while 12% of small business owners staging between 2015 and 2018 plan to ignore auto enrolment completely.

The survey of more than 500 businesses with 1-57 employees found that 28% feel there is a lack of support for tackling auto-enrolment legislation. Of those, 70% admitted they don’t know who to turn to and 29% don’t believe their advisers know enough about the subject

Whilst many SMEs won’t reach their staging dates until 2016, preparation should start now to ensure that businesses are compliant in time. Failure to do so could lead to expensive penalty notices from the Pensions Regulator, which increased by 20% in the last quarter.

The Pension Regulator recommends that businesses should start preparing 12 months in advance of their staging date, to meet their legal obligations in time.

The Fairstone Pension Trust is a high quality, low cost pension solution designed specifically to allow small to medium sized businesses to meet their obligations quickly and easily. The scheme is run by independent professional trustee company, Bridge Trustees Limited, a 100% owned subsidiary of global law firm, Eversheds LLP.

To find out more about the pension solution and for a free, personalised company risk report to show how auto-enrolment will affect your business, contact Fairstone Corporate Solutions on 0845 605 0680 or email info@fairstonepensionstrust.co.uk

http://fairstonepensionstrust.co.uk/

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