HR 1 August 2016

Why auto-enrolment neednt be a headache for micro firms

headache
One-in-ten micro firms still have no idea what auto-enrolment is.
The government isnt doing enough to raise awareness of lower-cost, high-speed workplace pension solutions among micro firms, writes Paycircle co-founder Catherine Pinkney.

Over the past week or so, The Pensions Regulator (TPR) has issued two new bulletins giving a progress update on the roll-out of compulsory workplace pension schemes among small and micro businesses.

While compliance levels overall are high roughly 95 per cent to date the TPR has warned that one in ten micro businesses approaching their ‘staging date? still have no idea what auto-enrolment is, while just over a fifth know what it is but havent the faintest idea where to start.

It will come as no surprise, then, that the number of penalty notices being handed out to small and micro businesses rose quite sharply in the second quarter of the year.

we used our powers a total of 4, 489 times during the last quarter, compared with 4, 161 in the previous three months, announced the TPR in late July.

Given that 57 per cent of UK employers left to stage are businesses employing between one and four people, the chances are that a lot more fines will be issued in the weeks and months ahead.

The hardest part of the great auto-enrolment roll-out was always expected to be the long tail of small and micro businesses, and that’s rapidly proving to be the case.

Things havent been made any easier by Brexit. Although were yet to see any hard economic fallout from the vote to leave the EU, many smaller business owners are understandably more focused than ever on their core propositions at present, which means that housekeeping and administration have become even less of a priority. Cue even more fines.

All in all, it’s more important than ever for the TPR to get its message out there that micro businesses need to start preparing for auto-enrolment, and soon or face a financial hit in the form of a fine.

Critically, the regulator also needs to debunk the myth that auto-enrolment is both time-consuming and expensive.

In our opinion, it’s above all the perceived mountain of work that setting up a workplace pension involves, not to mention the cost that is resulting in micro business owners procrastinating.


 
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