Under the pension auto-enrolment rules, 2016 is the year that many small and medium businesses will be required to enrol their eligible employees into a pension scheme.
This is because many businesses will have their “staging date” this year, which is the date that they are required to enrol their eligible employees into a pension scheme. The general position is the larger the employer, the sooner the staging date will be (unless that employer was established after 1 April 2012).
As set out in the article referred to below, the process to date has experienced “relatively few” employers having action taken against them for failing to enrol their employees into a scheme. However the concern is that smaller businesses, whose staging dates are fast approaching, may not have the knowledge or the resources to prepare for auto enrolment.
It is important for all businesses to be aware of their staging date and to prepare for it sooner rather than later by finding a pension scheme and assessing which of their staff are eligible to be automatically enrolled. The Pension Regulator website is a very useful place to start, and specific advice can be sought from a financial adviser regarding the various pension schemes available.
Of those employees that have been auto enrolled, just 10% have chosen to opt-out, which is down from the Department of Work and Pensions original estimation of an auto enrolment opt-out rate of 30%, which means thousands more people are now saving for retirement than ever before.