Pensions Deadline for Small Businesses Delayed
The Government has announced that businesses are to be given more time to comply with the requirement to enrol employees into a pension scheme.
Amid concerns about whether people are making adequate provision for their retirement, new rules have been introduced which will eventually require all businesses to make pension contributions on behalf of their employees. The employer will be required to contribute an amount equal to at least four per cent of the employee’s salary, with the employee adding a minimum of three per cent.
The rules will be introduced in stages. For employers with 250 or more employees, they will now take effect in February 2014, not October 2012 as originally planned. For businesses with between 50 and 249 employees, the new rules will be introduced on 1 April 2015, a year later than originally planned. For businesses with 30 to 49 employees, the rules will take effect on 1 October 2015 as opposed to 1 August 2015, and for businesses with fewer than 30 employees the enrolment date is now 1 April 2017, changed from 1 January 2016.
Steve Webb, Minister of State for Pensions, said, “We recognise that small businesses are operating in tough economic times, so we are softening the timetable for implementation to give them some additional breathing space. We are committed to ensuring the employees of these small businesses get the chance to save, and that is why no one will miss out.”
James Twine, Associate, Wolferstans says: “Whilst this decision will be welcomed by many businesses, it is important to ensure that you are ready when the new rules come into operation. We can help your business to prepare for the changes.”