A third of business owners unprepared for auto-enrolment
A third of business owners have not yet thought about how they will comply with the new auto-enrolment pension legislation, according to a survey by a Lancashire-based business advisory firm.
Of those surveyed, only one in three employers said they were already compliant with the regulations, despite the fact their ‘staging date’ could be as early as April 2014.
The online poll, conducted by Moore and Smalley Chartered Accountants and Business Advisers, also revealed that 17 per cent of business owners said they plan to handle the compliance work in-house, with a further 17 per cent outsourcing this to a professional adviser.
Moore and Smalley is warning business owners not to leave it too late to think about the new rules, which require companies to automatically enroll their employees into a qualifying pension scheme.
Dave Gleeson, a chartered financial planner at Moore and Smalley, said: “Many business owners think there’s still plenty of time to prepare for auto-enrolment, but ideally they need to start planning for the changes 12 months before their staging date, which is the date they are due to begin enrolling employees.
“Auto enrolment is not simply a case of setting up a pension arrangement. It also means complying with some detailed and ongoing regulations, which are under close scrutiny from The Pensions Regulator. And there are worrying suggestions of a potential ‘capacity crunch’ if the sheer number of businesses needing support results in a lack of professional advisers being able to assist the late-comers.
“The fact a third of businesses still haven’t thought about how they will comply is incredibly concerning as those firms are running the risk of incurring higher costs and damaging relations with their employees.”
According to Dave, businesses handling auto enrolment in-house should also ensure they are properly equipped to deal with the changes, which are likely to demand extra resources and flexibility.
He also warns business owners not to bank on staff removing themselves from the pension scheme, as latest government figures reveal fewer than 10 per cent of employees have chosen to opt-out so far.
He added: “With more and more businesses due to comply over the next 12 months, employers need to consider the huge financial and administrative burdens involved.
“We would urge all business owners to put the wheels in motion as they could face major struggles if they leave their preparation until the last minute. Employers should seek professional advice as soon as possible to minimise disruption and ease implementation.”
Moore and Smalley is holding a series of auto-enrolment drop-in days at its Preston, Blackpool, Lancaster and Kendal offices. The days are free to attend and places can be reserved by emailing firstname.lastname@example.org