Workplace pensions: the clock is ticking for SMES

1st October 2014

Nearly 4.5m people have now been automatically enrolled in a workplace pension, but the Pensions Regulator is worried about what happens next.

If you are an employer, the first fact you need to know about the auto-enrolment process for your business is your staging date; the date when you must have a suitable workplace pension arrangement in place, along with all the supporting administration.

Staging dates are determined firstly by your PAYE scheme size in April 2012 and secondly, from June 2015 onwards for employers with scheme sizes of less than 30, by PAYE reference numbers. The first staging date was 1 October 2012 and the last, for new employers between July and September 2017, does not occur until 2018. So far it has only been large and medium-sized (60 or more employees) employers who have reached their staging dates. As a result, the 4.5m figure relates to fewer than 30,000 employers. In the next two years, as smaller employers reach their staging dates, the numbers of businesses (as opposed to employees) will soar. The graph below, published by The Pensions Regulator (TPR), makes the point.

Last month TPR issued a warning to small businesses to check their staging dates. This was prompted by research undertaken by the regulator which showed that nearly one in five small (5-49 workers) did not know their staging date, while among micro employers (1-4 workers), almost half were unaware. Even those who claimed to be aware of their staging dates were not that knowledgeable: only 43% of small employers and 28% of micro employers had dates that matched TPR’s own records.

The regulator says that businesses should start planning for automatic enrolment a year before their staging date. Given the surge in numbers that is due in the final quarter of 2015/16, an earlier start may be wise to avoid the inevitable rush. If your business has done nothing about auto-enrolment yet, why not start talking to us now and, at a minimum, draw up a timetable for action?

The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

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