SMEs urged to plan after pensions delay
Dave Gleeson of Moore and Smalley said firms should use the extra time wisely to minimise the impact of the new system.
He added: “The decision to put back auto-enrolment is an opportunity to plan ahead and ensure your business is financially and operationally prepared. These changes have enormous implications for the financial management of all businesses and their introduction remains inevitable. The 12-month period of grace should be used to adjust financial arrangements and factor in the effects of employer contributions on the company.”
Pensions minister Steve Webb recently confirmed the revised dates for automatic enrolment after the Government’s decision to delay the reforms for SMEs. However, medium sized employers, those with 50 to 249 employees, have been given fresh auto-enrolment dates from April 1, 2014 to April 1, 2015 while small employers will see their introduction dates postponed to between June 1, 2015 and April 1, 2017.
Dave added: “The delay means the increase in the minimum rate of employer pension contributions from one per cent to two per cent of banded earnings will be put back from October 1, 2016 to October 1, 2017. Employer contributions will then increase to three per cent from October 1, 2018.”