15/07/2015

By Matthew Mitten, Director of Enrolsme


Since the beginning of the year, The Pensions Regulator (TPR) has written to hundreds of thousands of small and medium-sized enterprises (SMEs) - providing warning and information about their automatic enrolment duties as an employer.

And, reassuringly, the regulator has been continuing to step up its enforcement activities when it comes to the legislation. During the first quarter of this year (1 January - 31 March 2015), four escalating penalty notices were issued.

Small businesses - soon to confront their automatic enrolment duties - need to take TPR's actions seriously, because it is fully intends to enforce this legislation and to ensure that businesses enrol their staff into workplace pensions.

Research we reported on in March 2015 highlighted that 97% of those businesses we questioned stated that they intend to comply with the legislation. Whilst only 3% advise they won't comply. However, whilst this seems a relatively low figure, it equates to circa. 45,000 small businesses in total; that's still a pretty high proportion of the SME community.

The research also highlighted that nearly one third (31%) of employers still don't know what automatic enrolment is, increasing to 37% in companies with
5-10 staff.

Given the fact that many small businesses will need to comply over the next few years, or face heavy fines for not doing so, I find the general lack of awareness and apathy - on the part of some companies - concerning.

I appreciate how precious time is for any small business owner-manager.

Putting a pension scheme in place is probably not high on their priority list, given how likely it is to detract them from the day job.

Getting the automatic enrolment message across to this audience is not an easy task. More needs to be done or there is a real danger people will leave it too late or get fined.

When it comes to automatic enrolment, the time has come for greater clarity and improved communication at all levels. Only then will the messages filter through, and they need to highlight that it doesn't need to be complex. It doesn't have to be about the fear of the unknown; there are providers and partners who can guide businesses through the process quickly and easily.