Many pension providers will cease to offer auto enrolment schemes to small businesses, according to research conducted by Defaqto on behalf of Now: Pensions.
The survey asked 248 advisors their thoughts on the ongoing auto enrolment rollout, with 77 per cent predicting that the number of pensions providers not offering auto enrolment to small firms, in any shape or form, will rise over the coming months.
Around a third of the advisors surveyed said there is simply not enough choice when it comes to the pension options available to smaller employers, as they move nearer to their auto-enrolment staging dates.
Additionally, 82 per cent of advisors said they have been selective in the businesses they have approached. Many revealed they are worried that SMEs – especially those with 30 employees or less – will struggle to fit new pension commitments around their current daily responsibilities, particularly if they have no experience in dealing with them.
Biggest Challenge Yet To Come
The roll out of auto-enrolment to small firms only began recently – and although there has been sufficient notice, the problems faced by micro firms are entirely different to those which large companies will have to deal with.
With the news that advisors are considering cherry-picking SMEs – and news that The Pensions Regulator (TPR) has issued 50 unpaid contribution notices, 68 fixed penalty notices and 119 compliance notices – those in charge of pensions and payroll at small companies need to understand where they stand, and what to do when it comes to auto enrolment.
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Companies must employ highly skilled and attentive payroll professionals to ensure they are well prepared for the challenges faced during the roll out of auto enrolment.
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