This one is a pet subject for me but I make no apologies in repeating the theme. A recent study has again highlighted that many businesses are still not aware of the new pension rules that come into force from next year.
The survey looked at businesses that do not already provide pensions found that the employers are unlikely to auto-enrol employees into either NEST or an employer's scheme when the reforms come in. This is in clear contrast to the requirements of the new regime and highlights a lack of awareness.
This suggests that these employers have not grasped the full extent of their responsibilities under auto-enrolment, which is being phased in over four years and is due to start in October 2012.
Under the new pension reforms employers will be legally obliged to:
- Automatically enrol certain workers into a pension scheme
- Make contributions on their workers behalf
- Register with the Pensions Regulator
- Provide workers with certain information about the changes and how they will affect them.
After they have been auto-enrolled, employees can opt out of the schemes but the key here unlike previous stakeholder pension schemes is that they will have to physically opt out rather than just not join.
The study completed by the Association of Consulting Actuaries (ACA) showed that 33 - 39 per cent of smaller businesses are also predicting, and relying on large numbers of staff opting out, keeping costs down.
If you are an employer and want to know more about the new pension reforms the Pension regulator has released an excellent website with some easy to use tools. You can find it here New Pension Reform Tools
Employers be warned!
