Pensions auto-enrolment delayed further for small firms

Employers with fewer than 50 staff given extra time under legislation The government has announced that firms with fewer than 50 staff will be given extra time before they have to start auto-enrolling employees into pensions.

Auto-enrolment, which comes into force from October 2012 for the largest firms, was due to be introduced on a staged basis in accordance with company size, with the smallest companies being included from April 2014. However, the revised timetable will see the smallest employers given until May 2015 to comply.

Pensions minister Steve Webb described the move as a “sensible step that would ensure long-term pension issues are addressed while meeting the short and medium term needs of small business”.

"Automatic enrolment will help millions save, and to not act will leave people poorer in retirement,” said Webb. “That is why I am confirming today that automatic enrolment will start on time and all employers will be part of it.

"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.”

CIPD reward adviser Charles Cotton said that despite the government’s concession, employers should consider providing pensions for all staff at the first opportunity.

“The government’s decision to postpone the implementation of pension auto-enrolment for small employers is a great opportunity for our members to promote their own organisations as being decent places to work in terms of pensions,” said Cotton. “With talent always at a premium, this decision will help but blue water between those employers that are willing to contribute to the retirement plans of their employees and those that aren’t.”

Source: People Management