According to a new study, many small and medium sized enterprises (SMEs) are unprepared for the upcoming auto-enrolment pension rules, despite the deadlines drawing closer.
The study, by law firm Irwin Mitchell, found that almost 60% of small businesses had not budgeted for the new pension scheme. A similar amount admitted they have not yet assessed their staff contracts and how these would be affected by auto-enrolment, while almost 40% said their payroll is not compliant.
Under the new auto-enrolment rules, all employers will have to offer a pension plan to eligible employees. Those who don’t make the necessary changes will be subject to substantial fines.
For small businesses with fewer than 50 employees, the rules won’t come into effect until 2015 – but experts have warned that it could take these smaller businesses some time to prepare for the changes. Larger businesses have already begun the scheme, while those with between 250 and 160 employees have until next April to ensure they are compliant.