A number of UK small businesses are being warned to register for auto enrolment pension schemes as soon as possible to avoid the threat of enforcement action, according to pensions regulator, Legal & General.
The regulator requires employers with between 90 and 159 members of staff to begin their staging process in May, with 12,000 firms still yet to register at present.
Jim Islam, executive managing director corporate, of Legal & General Assurance Society, said: “Many businesses we are speaking to have not yet registered a pension provider for auto enrolment despite being only a few weeks away from their staging date.
“Last month the Department for Work and Pensions made it clear that it expects small businesses to implement value for money, well-governed DC schemes to help employees save for their retirement.
“It is the responsibility of the employer to have a qualifying scheme in place by their staging date or risk hefty fines.”
Employers concerned about missing the deadline for auto enrolment should check two key things:
Ensure they have an auto enrolment qualifying scheme, which confirms that employer and employee contribution levels meet the standards set for auto enrolment – very important for companies wishing to use existing pension schemes.
Check their pension provider is able to meet the new regulations for auto enrolment pensions – such as the pensions charge cap of 0.75 per cent which will come into law by April 2015.
“For businesses staging this year, if their current pension provider ticks these boxes they should register for auto enrolment without delay,” added Islam.
“If not they should switch to a pension provider who is geared up to implement these new standards to avoid any last-minute surprises.”