December 06, 2011 - Anonymous
Small firms will get an extra year before they must introduce workplace pension schemes for staff, the Government has announced.
Firms with fewer than 50 employees will not have to enrol staff in pension schemes until May 2015, following an announcement by the Department for Work and Pensions (DWP). The original deadline for small businesses was April 2014.
Larger firms will still be required to start auto-enrolment in October 2012.
According to pensions minister Steve Webb, the revised timeline is intended to give small firms “breathing space” in the current economic climate. “We recognise that small businesses are operating in tough economic times, so we are softening the timetable for implementation,” he said.
Confederation of British Industry director for employment Neil Carberry said: “A longer phasing-in period for these reforms will help small firms cope with costs they would have incurred if they’d been brought in during 2014 and 2015.”
However, the British Chambers of Commerce (BCC) said that many small firms were still confused about the new rules and anxious about costs.
“Since smaller businesses will now not be required to auto-enrol their staff in pension schemes until the next Parliament at the earliest, the Government has an important window of opportunity to pare back the costs they face when they do join the system,” said John Longworth, BCC director general.
Introduced by the Government to address the so-called pensions gap, auto-enrolment in workplace pension schemes will be phased in over a four-year period starting from next year.
Under the new rules, all eligible employees – classified as those aged over 22 and earning at least £7,475 a year – are to be automatically enrolled in a workplace pension scheme, and employers required to make a minimum 3 per cent contribution. Employers can use an existing pension scheme or opt for a new qualifying arrangement, while those already contributing above the minimum threshold will not have to make any changes.