Press Releases
January 2011
Fears over new pension scheme
Essex chartered accountants Rickard Keen LLP are warning business owners that new rules requiring almost all employees to be automatically enrolled into workplace pension schemes could prove costly for smaller firms.
Rickard Keen partner Kate Davies said: “Under the plans, due to be phased in between 2012 and 2017, employers will normally have to enrol their staff into a scheme unless they explicitly opt out, with the employer then paying in the equivalent of three per cent of the individual’s salary.”
The government has claimed that, for a small firm employing four people, the administrative cost would be just £46 per person, but the Federation of Small Business (FSB) has dismissed the figure, claiming a firm with four employees would end up paying an extra £2,550 per year in administration and pension costs.
The FSB has called for very small employers to be excluded from the scheme, and for the Pension Regulator to take a ‘light touch’ approach to enforcing the rules.
It has also demanded that the government conduct a full impact assessment immediately, to get a more accurate picture of the true cost of the reforms to small businesses.