Pension complexities taking their toll on SMEs

Thousands of firms across the UK are struggling to come to terms with the complexity of pension requirements and could even be set to miss their deadlines.


According to the Lighthouse Group, the vast majority of small employers could miss their staging date for auto enrolment while their operations could also be impacted.


Many firms are only now becoming aware of their responsibilities and are facing up to the complex process for the first time.


The Pensions Regulator recently suggested that just 29% of those staging in 2016 were aware of the need to act, while that figure increased to 46% of those staging the year after.


A great deal of payroll management is needed with meeting the new pension requirements, as there plenty more to it than simply setting up a scheme and putting staff on it.


Firms must decide who to enrol, alongside calculating how much both they and their employees will contribute.


It is vital that companies keep records of this information and of any changes they make, which signals a vast portion of additional work that is needed, especially for smaller firms.


This will require some staff to take time away from their regular roles in order to carry out administrative tasks, potentially leading to a certain level of disruption with a company.


Good management will have an essential role to play in limiting any negative impacts that are felt by a company.


Similarly, efforts would be required to ensure that all payroll and other information is up to date as it could potentially slow the process if this is not the case.


This requires much of the data to be sorted in advance and firms could struggle to meet staging dates if they do not start soon enough.


Fines for non-compliance could also impact them, placing a strain on company finances and potentially leaving them in need of business rescue if operations are really badly affected.


By ensuring that a focus remains on the everyday running of a business through good management practice, firms should be able to overcome pension complexity issues without their firm noting any negative side effects.


By Phil Smith


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