One in four small firms miss Auto Enrolment staging date

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One in four small firms miss AE staging date

One in four small firms (25%) have missed their deadline or (staging date) for auto-enrolling their staff into a pension scheme. This is an increase from less than one in five (18%) in Q3 2016, according to workplace pension provider NOW: Pensions.

Of the companies that signed up with the company in the first quarter of 2017, nearly half (46%) signed up either very close to or after their staging date deadline had passed – the highest number ever recorded. At the other end of the spectrum, around a third (35%) of small firms had planned a clear six months or more ahead of their staging date.

Commenting on the figures, Morten Nilsson, CEO of NOW: Pensions said:

“There are an estimated 700,000 new businesses to stage until the end of auto enrolment in April 2018. It’s clear from our figures that an increasing number of firms are burying their heads in the sand when it comes to their auto-enrolment duties.”

“This can be costly, as the Pensions Regulator (TPR) has begun to issue Fixed Penalty Notices to employers who miss their staging date deadline, which left ignored, can escalate into a County Court Judgement (CCJ) and could negatively impact the company’s credit file and their ability to secure funding in the future.”

“Our message to these employers is to plan well ahead, ideally up to six months before their staging date, as this will ensure enough time is given to comply with their auto enrolment duties as set out by TPR. Auto enrolment is complicated so the longer firms allow themselves to tackle it, the more confident and comfortable they’ll feel.”

Commenting, Sean McSweeney, corporate manager, Chase de Vere, said the number is higher than he would have expected.

“Employer don’t have to complete a statement of compliance to the Pensions Regulator until five months after their staging date and so do not show up on the official figures until then.”

By contrast, Nathan Long, senior analyst at Hargreaves Lansdown, said:

“It is no surprise the number of companies missing their auto-enrolment deadline has increased. As we get down to the smallest companies, it is the owners who are increasingly taking responsibility for enrolling their staff into pensions.”

“They also have the small matter of managing a business to attend to, unlike larger companies who often have entire teams dedicated to running the company pension plan. Smaller companies are also less likely to have a company pension in place, meaning they must also decide which provider to use.

“Any employers yet to start auto-enrolling their staff into pensions need to find out when it will apply to them and quickly. With this knowledge they can find the right pension provider for them, understand what they have to do and plan accordingly. The Pensions Regulator website is a great source of information which will answer most queries.”

Petaurum Solutions’ Comment

Complying with complex Auto Enrolment obligations can be a daunting prospect for many small and micro-sized business. Choosing a cost effective, long-term implementation solution is critical for these businesses to ensure they do not become swamped with the processing requirements and responsibilities that Auto Enrolment can bring. Therefore, for businesses considering their solution, focus should not only be on the pension scheme, but also on how it will be administered, methods to communicate, impacts on systems and data collection processes along with any HR and Legal changes may you need to make.

Our Defaqto 5* quality Carey Master Trust Pension Scheme, 
comes with best in class assessment and communication software and is part of our SME specific, competitively priced end-to-end solution that will take care of the above, leaving you free to manage your business safe in the knowledge that your Auto Enrolment obligations are in professional hands. Want to know more? Then feel free to download our info pack here, or contact us to secure your PAE future.

This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal, HR or benefits advice in any specific situation. Petaurum Solutions is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.