Auto-enrolment pensions postponed for small business

Published:  26 January, 2012

LONDON: The government's auto-enrolment pension scheme has been pushed back for SMEs by up to five years following a revised timetable.

Firms employing between 30 and 49 staff will not now have to enrol staff until 1 August 2015 at the earliest and those businesses with fewer than 30 staff will not have to comply until 1 January 2016, at the very earliest, but as late as April 2017.

The Department of Work and Pensions said given the "exceptionally tough economic time", smaller firms will be given longer to introduce the scheme. However, the dates for employers with 250 employees or more, remain unchanged with implementation due to begin on 1 October 2012, and the other large firms will follow suit until all have introduced auto enrolment by 1 February 2014.

Phil Orford, chief executive, Forum of Private Business said: "We welcome the government's clarification on the dates for auto-enrolment. This temporary delay will allow small firms to now focus fully on running their business until the economy is back in firmer territory.

"We believe this will also allow small businesses the extra time to plan for and subsequently implement the scheme successfully."

Steve Webb, Minister for Pensions said: "Automatic enrolment will begin on time this October, taking up to 10 million people into pension saving, many for the first time ever, and all employers will be part of it.

"We have done all we can to ease any burden on business the reforms will bring and employers of all sizes now know the date they need to start enrolling their staff."

The level of pension contributions will also be phased in over time to help employers and individuals adjust. Full contributions will not have to be paid until 1 October 2018.

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