Could pension auto enrolment be a small business timebomb?
It seems like the pension regulator has greatly under-estimated how many SMEs will be affected by the auto enrolment pensions legislation that is coming in to force right now by 500k. You could be affected.
Tamebay has highlighted this before. If you employ anyone, you need to be be aware of the changes.
Will Wynne, co-founder and managing director of auto enrolment firm Smart Pension said: “We have carried out a lot of our own market size modelling using detailed government company population data and have always felt that the official market sizes estimates were significantly too low.
“The peak was originally predicted to hit in 2016 when 20 times the current level of companies was set to auto enrol. Now that the estimate has been revised, the regulator is suggesting the peak will hit in summer 2017, with 350K small firms having to fulfil their auto enrolment duties, nearly double the previous forecast auto enrolment peak.
“It’s going to be an unprecedented rush, with vast numbers of SME owners with no previous pensions experience setting up a scheme for their employees. Pensions is a slow moving market and nearly all existing pension firms rely very heavily on traditional, manual processes which are likely to bend and break under the strain.
“This is exactly why we have purpose built Smart Pension’s workplace pension around advanced technologies that allow SMEs to sign up and get compliant within minutes, in one sitting (and at no cost to the employer). An independent comparative analysis of our platform showed it is three times quicker than the government’s solution, Nest, and offers far more functionality (eg assessing the employer’s workforce and auto generating letters to employees). Most pensions providers will be nervous about this hike in forecast numbers; we’re looking forward to it.”