FSB “disappointed” with Pension Plans for Small Businesses
From 2012 all firms must contribute to their employees’ retirement pensions
If the plans go ahead, an estimated eight million people will save into pensions for the first time.
While this is a welcome change for many workers whose pensions plans are currently unsupported by their employers, the FSB has expressed concerns that very small firms will find the commitment too much of a burden.
“While the FSB welcomes initiatives to help people save for their future, it is severely disappointed the Government has not listened to the needs of the UKΓÇÖs micro firms,” said Mike Cherry, policy chairman at the FSB, according to TheBusinessDesk.
He added: “(It) has not made them exempt from automatic enrolment into pensions, which will cost employers in time and money.
“We know that small firms do not feel confident in choosing a pension scheme because of its complicated nature, so are pleased that the Government has put in steps, such as the waiting period, to make the administrative burden slightly easier.”
Under the proposed plans, staff must be earning at least ┬ú7,475 before they are enrolled on the scheme. This would prevent many firms from having to pay out for temporary workers, but it does require businesses of any size – even those with just one employee – to contribute to a pension scheme.
Companies will be required to contribute 3% of their employees’ pay, with each person paying 4% and the Government committing 1%.