The requirement for all employees to be enrolled automatically into a pension scheme is due to be implemented in 2012, but it seems there are still some aspects of the legislation that are causing concern.
The FSB for example is very disappointed that micro firms are going to need to comply with the legislation. The Federation argues that the changes are too complicated for a micro business to implement and the greater majority of small business owners do not know enough about pensions to be able to choose a suitable scheme for their staff.
Research carried out by the FSB showed that 70% of business owners are not confident about choosing an employee pension scheme. The government has acknowledged this and said that small business owners will not be liable if something goes awry with the scheme they have selected.
Both the REC and the FSB are pleased to learn that there will be a three month waiting period before automatic enrolment and employees don’t have to be enrolled if they earn less than their personal income tax allowance threshold.
The three month waiting period should come as a relief to recruitment agencies and contractors alike. Pension provisions for temporary workers who work a couple of weeks for one agency and then a couple for another could have got very complicated if automatic enrolment commenced from day one! An agency temp can however opt into a scheme before the waiting period is up if he/she so desires.
The pension scheme created by the government, the National Employment Savings Trust, will proceed as planned to help businesses comply with the new legislation and NEST liabilities will fall under the auspices of the Department for Work and Pensions.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Electric Blue by davi sommerfeld
