Small employers get extension to auto-enrolment November 2011
Posted date: 29 November 2011
Small businesses will not have to auto-enrol their
staff until May 2015, more than a year after the
original schedule.
staff until May 2015, more than a year after the
original schedule.
The Minister for Pensions, Steve Webb, has confirmed that firms employing fewer than 50 members of staff will be given more time to prepare for the pensions reform. The Government has altered the timetable as a result of economic hardships, although it fell short of making these firms exempt.
“We recognise that small businesses are operating in tough economic times so we are softening the timetable for implementation to give them some additional breathing space,” commented Webb. “This ensures long-term pension issues are addressed while meeting the short and medium-term needs of small businesses.”
The pensions industry has hit back at the move arguing that those working for small companies would benefit the most from auto-enrolment as they are the least likely to have a pension.
“Businesses will quite rightly be wondering how much faith they can have in the system, and whether more upheaval is in the pipeline,” said Joanne Segars, Chief Executive of the National Association of Pension Funds.
“The Government needs to restore some trust in these hugely important changes. The UK simply is not saving enough for its old age, and we have to get these reforms right,” she commented.
However, Steve Herbert, Head of Benefits Strategy for Jelf Employee Benefits, believes that the change was long overdue.
“The economic situation is unprecedented, and has been for a few years now. I just wonder why it has taken so long to officially recognise that this is likely to have an impact on the success of auto-enrolment,” he commented.
Herbert argues it is more important the reforms are seen as a success than sticking to the original timetable, even if it means postponing the enrolment of some employees.
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- November 2011
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