We urgently need help on pensions, say smaller firms
SMALLER companies that must enrol staff in workplace pensions are desperate for an official list of pension providers as the starting dates for them to have a scheme in place loom.
Nearly two-thirds of small and medium-sized firms that have not begun auto-enrolment say they would welcome the publication of a definitive list of providers that accept all firms – regardless of size – to help them comply with their duties, said pensions provider NOW: Pensions. The Pensions Regulator said this month that it would not publish such a list.
Small firms with fewer than 50 staff are due to reach their staging dates from June, and while thousands of workers have been autoenrolled at larger companies, only three per cent of firms have completed the process.
Of the firms surveyed which have yet to complete the process, twothirds do not have any existing pension arrangements for staff, while eight per cent have set up a stakeholder pension scheme but do not have any staff in it. A quarter already offer a scheme to some of their workforce.
More than a quarter of those yet to set up schemes have given no thought to how they will go about finding a provider, with one in ten planning to search the market them- selves. Another quarter intend to get help from their accountant, while one in six intend to rely on their existing provider for advice. Just six per cent plan to speak to a financial adviser.
Morten Nilsson, chief executive of NOW: Pensions, said: ‘As smaller companies begin to tackle autoenrolment, the number planning on choosing their provider without any advice is inevitably going to grow.
‘This is why the Regulator’s decision not to publish a list of schemes that are directly available to any employer was so disappointing.
‘These firms urgently need help to find high-quality, low-cost providers that are willing to accept their business, and the regulator needs to hear their pleas before it’s too late.’ John Allan, chairman of the Federation of Small Businesses, said: ‘Small and micro employers will need guidance on what to look for when choosing a scheme. Many employers will want to compare schemes before making a choice, but doing so isn’t straightforward.’
Meanwhile, Will Wynne, chief executive of delivery firm Arena Flowers, found news he had to comply with auto-enrolment so baffling that he had the idea to launch a new business, an auto-enrolment provider called Smart Pension.
He said: ‘We launched the business on the basis that I had no idea about auto-enrolment. It is an employer’s duty to educate employees, so we wanted to set up a one-stop-shop. We wanted it as slick as possible.’