Pensions minister Steve Webb has confirmed the dates by which small firms will have to auto-enrol their staff into a pension scheme.
Auto-enrolment, in which employees will be entered into a pension scheme unless they actively opt out, comes in for the largest employers in October this year and then on a staged basis for progressively smaller companies after that. However, last November the government announced it was rethinking the dates for smaller employers in response to concerns about burdening businesses during an economic recovery.
There is no change in the staging dates of organisations with 250 or more employees, which will see their auto-enrolment duty come in between October this year and February 2014. But staging has been pushed back for those with 50-249 staff, who face dates between April 2014 and April 2015; for those with 30-49 staff, between August and October 2015; and for those with under 30 staff, between January 2016 and April 2017. The last tranche will involve newly-created companies and will be completed in October 2017.
"Automatic enrolment will begin on time this October, taking up to 10 million people into pension saving, many for the first time ever, and all employers will be part of it,” said Webb.
"We have done all we can to ease any burden on business the reforms will bring and employers of all sizes now know the date they need to start enrolling their staff."
Rudi Smith, senior consultant at Towers Watson, criticised the delay.
“Auto-enrolment was conceived against a backdrop of rising personal incomes and a growing economy,” said Smith. “It will obviously be tougher for employers and employees to absorb the costs of contributions in today’s environment, but paying for retirement is not getting any cheaper. The government is saying there will be no further delays regardless of what happens to the economy, and employers will have to plan on this basis.”
He added that employers were still waiting for some detailed regulations on implementation, despite many of them having to plan for staging dates which are looming fast.
“The latest delays do not give large employers any more time to work out how they will comply with a panoply of complex rules and regulations, some of which are only now being finalised,” said Smith. “As employers get their teeth into these rules, they are finding that many things do not work quite as they thought. They are also waiting for the government to finalise standards that existing pension schemes will have to comply with. Large employers won’t have much time to firm up their plans after these are published.”