Small businesses need to be ready for pensions auto-enrolment


Scottish small businesses are being advised to prepare themselves for the implamentation of legislation which will require all business to enrol their workforce into a pension scheme.


The legislation came into effect in 2012 and has been phased over a 5 ½ years.


Larger companies were rquired to bring the scheme in earlier, this started in 2012 and now the auto-enrolment (AE) will come into effect for smaller businesses from 1 April this year.

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There are three key dates this year which will affect businesses of different sizes. Companies with 50-53 workers required to begin AE on 1 April 2015, companies with 40-49 workers have until 1 August 2015 and finally companies with 30-39 workers have a deadline of 1 October 2015.

The Association of Chartered Certified Accountants (ACCA) have advised that business prepare themselves for the changes. According to them figures show that there are 322,000 companies across the country that are classed as being a small or medium sized business.


Craig Vickery head of ACCA Scotland said: “ACCA has been working with The Pensions Regulator and the Department of Work and Pensions (DWP) to help them iron out the kinks in the system to try and make the transition as smooth as possible for small companies.


“We have always argued that the government should ‘think small first’ when it comes to changes in business regulation and the fact the government has used a phased approach to AE shows that they are heeding our message.


“Workplace pensions have been declining in numbers for decades but it is hugely important that employees think as early as possible about saving for their retirement. Our own research has shown that the majority of ACCA members in practice are ready to help employees who want more information about AE.


“One of the biggest challenge that small businesses will face is finding a pension provider who can meet their needs at a price that is reasonable for both the provider and the business. Pension providers will need to be flexible in their offering to small businesses to make the system work for all.”


The legislation has been designed to encourage a retirement savings culture in the UK and Depending on the worker’s age and salary level, employers may be required to make contributions to this pension scheme, adding to the contributions made by their workers.


AE is a statutory requirement and employers can face a fine from the regulator is they fail to offer a compliant scheme by their start date. Companies with fewer than 30 employees will have starting dates between 2015 and 2017.