"Appropriate arrangements will need to be in place to ensure employees can be auto-enrolled in a pension scheme, IT and payroll systems are adequate, registration with the Regulator is carried out and crucially that suppliers are given adequate lead in time to support any new or updated processes."
Small and medium sized enterprises which have yet to start planning for the introduction of auto enrolment legislation, may struggle to secure a supplier, according to KPMG. The professional services firm is advising SMEs to be fully prepared ahead of a number of key staging dates in 2014.
From October 1st 2012, Government legislation paved the way for all employers to contribute to workers’ pensions. In the first instance, employers will have to make a minimum contribution of 1%, rising to 3% by 2018.
Andy Seed, Pensions Director for KPMG in the South East said 2014 is going to be a landmark year for a large number of companies:
“We’ve already heard anecdotal evidence from a number of suppliers who say that they won’t consider putting themselves forward for business unless an SME has come to them at least three months ahead of their staging date.
“The inference is clear – if your business does not take planning seriously it may struggle to find a pension supplier suitable for your business. If the arrangement is not set up in time this could leave the company in breach of its statutory requirements, while staff will miss out on the intended benefits.”
Those companies found to be in breach of statutory requirements face a range of sanctions with the Pensions Regulator having pledged to punish persistent and deliberate non-compliance. Financial fines include an initial fixed penalty notice of £400, escalating to additional daily fines in the range of £50 to £10,000 for continued failure to comply with a statutory notice.
Mr Seed continued: “If they have not done so already SMEs need to consider elevating auto enrolment to top priority.“
Appropriate arrangements will need to be in place to ensure employees can be auto-enrolled in a pension scheme, IT and payroll systems are adequate, registration with the Regulator is carried out and crucially that suppliers are given adequate lead in time to support any new or updated processes."
Failure to do this could leave businesses facing needless substantial financial penalties at a time when the economy is improving, and where any extra investment should be used to secure fresh economic growth.”
- ENDS -
Notes to editors
Table of auto enrolment staging dates in 2014
|Company Size||Staging Data|
|350-499||1 January 2014|
|250-349||1 February 2014|
|160-249||1 April 2014|
|90-159||1 May 2014|
|62-89||1 July 2014|
|61||1 August 2014|
|60||1 October 2014|
|59||1 November 2014|
For media enquiries please contact:
T: 020 7694 6506
KPMG Press Office: 020 7694 8773
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.