The government has decided to delay the introduction of pension auto enrolment for small businesses. Firms with less than 50 workers are to be given an extra year before they will need to comply with the new pension rules, after the government deferred the original starting deadline for this group from April 2014 to May 2015.
Some commentators have said the delay may give employers with just over 50 workers an incentive to manage down the number of workers they have to prevent the business from exceeding the threshold and thus delay having to provide the new pension provision. Under the current timetable, if a firm employs 51 people as at 1 April 2012, they will be required to provide a pension much earlier, from 1 July 2014. Despite this, the British Chamber of Commerce has welcomed the delay, by saying ‘pension auto enrolment imposes huge costs on business, with the government’s own estimates suggesting it will cost employers over £4.5 billion per year’.
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