Morten Nilsson, CEO, NOW: Pensions said: “Auto enrolment is working but its biggest challenge is yet to come. Owners of small firms will have little or no experience of pensions and will be fitting auto enrolment in around their other day to day responsibilities. These firms are going to need considerable help both setting up their schemes and with ongoing administration.
The Pensions Minister, Steve Webb says there is a lot of support coming for smaller businesses with fewer resources to deal with the demands of Auto Enrolment. In addition to contributions, employers will have to cover the costs of preparation leading up to the Staging Date. He suggests contributions will rise in line with pay rises, well, as they are a percentage of pay, we would expect that.
Revised figures from the Pensions Regulator show the dramatic scale of the reforms with 1.34 million employers having to comply with new legislation over the next 4 years.
Small employers are underestimating the time needed, the cost of implementation and the effect Automatic Enrolment will have on their business. Scottish Life, a provider of pensions suitable for Automatic Enrolment has analysed the capacity available to support smaller businesses.