By Maximilian Clarke
Among the policies introduced by the Chancellor during the Autumn Statement, the Government confirmed that the enrolment deadline for small businesses has been pushed back from April 2014 to April 2015.
Small businesses will be given additional time to prepare for the implementation of automatic enrolment. The timetable will be adjusted so that no small employers are affected by the reforms before the end of this Parliament.
Commenting on the news, Eric Norman-Walker, Director of Menzies Wealth Management says the matters will further complicate businesses trying to adjust to rapid changes in legislation:
“Whilst a reduction in red tape is always helpful for small businesses, the delay in implementation of auto enrolment simply creates further difficulties for the future. The bottom line is that most employees are not funding for their old age and delaying compulsion will simply make matters worse. Smaller pension funds will cause larger state benefit costs.”
Over a period between 1 October 2012 and 31 March 2016, all employees will have to be automatically enrolled into a qualifying pension scheme. This could be in an occupational pension scheme, a personal pension scheme or the government’s default scheme — the National Employment Savings Trust (NEST).
Contributions will have to be made by both the employer and the employee. Employers who are already contributing above the minimum threshold to an employee pension scheme will not have to make any changes
The Government will be introducing the scheme over a four year period. It will be based on the size of the employer (typically by PAYE size) and employers will be given the flexibility to enrol workers either side of their automatic enrolment date.
Minister for Pensions Steve Webb said: “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.”
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