Small and Medium Size Enterprises with less than 50 employees will be given a reprieve of one year before having to comply with automatic pension enrolment. The date has been moved to May 2015, giving small businesses more time to prepare. The process for large companies will still go ahead in October 2012.
The delay for automatic enrolment is thought to affect almost 4 million UK workers. According to Steve Webb the pension’s minister, all employers will have to comply with the new rules, although he says that the delay for small businesses is sensible. The announcement was welcomed by the British Chambers of Commerce. The director general of the BCC, John Longworth said:
“Pensions auto-enrolment imposes huge costs on business, with the government’s own estimates suggesting it will cost employers over £4.5bn per year.”
However, others were disappointed by the decision, Brendan Barber, the TUC general secretary being critical. He disagrees with the decision to make employees wait even longer for the right to employer contributions to pensions. The opinion was echoed by the National Association of Pension Funds, who pointed out that employees in small businesses are least likely to have a company pension.
Figures provided by the Department for Work and Pensions indicate that automatic pension enrolment will affect between five and nine million employees. The rules will mean that employees with an existing pension will have to contribute more, or join the current employer’s pension scheme. Employees will also have the opportunity to join the National Employment Savings Trust.
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