More than half of small businesses have a positive view of auto-enrolment once they complete the staging process, research has shown, but experts say navigating its complexities will continue to burden many employers.
Concerns over the tail end of the phasing-in process were high last year, as many believed small and micro-employers lacked the support and resources to implement the reforms.
Earlier this year, the Pensions Regulator reported it had issued 1,139 notices of non-compliance in Q4 2014, up from 163 in the previous quarter.
And in its corporate plan outlined last month, the regulator said it expected non-compliance to rise further, leading to "increased use of compliance notices, fixed penalty notices and escalating penalties".
Research published by Barclays Corporate & Employer Solutions last week, which surveyed around 2,000 SMEs, showed 54 per cent that had already staged saw auto-enrolment as a positive, compared with 25 per cent of those yet to stage.
Among the 54 per cent, respondents said they experienced improvements in employee engagement, attraction and retention of staff, as well as productivity.
Grant Hughes, head of SME at Barclays Corporate & Employer Services, said while the findings were positive, more needed to be done to prevent some employers falling through the cracks.
People are aware of auto-enrolment, whether they're aware of the detail varies from business to business
Grant Hughes, Barclays Corporate & Employer Services
“The whole industry has a responsibility,” he said. “People are aware of auto-enrolment [but] whether they’re aware of the detail varies from business to business.”
Lena Levy, head of pensions at business lobby group the Confederation of British Industry, agreed, and said while businesses are supportive of auto-enrolment and progress has so far been successful, “the regulations have been complex to navigate and the administration burdensome”.
“We must remember we are only halfway through, and 2015 is a crucial year as small businesses will begin enrolling staff, and re-enrolment will begin for some larger firms,” Levy said.
She added: “Whoever forms the next government should focus on supporting employers through the process – not tinkering with regulations nor undermining the delicate consensus that underpins it.”
Positive reinforcement
But Phil Duly, associate at consultancy Barnett Waddingham, said the latest round of pension reforms, affecting largely defined contribution savers, would help improve employers’ feelings about auto-enrolment.
“The employers’ impressions will be more positive in light of the new April flexibilities,” he said. “There will be more demand in the workplace for DC pension provision.”
Some employer representatives have voiced concern over the pace of change in auto-enrolment, saying any attempts to alter the legislation are premature.
David Nash, senior policy adviser at the Federation of Small Businesses, said: “We’ve seen some talk about lowering the auto-enrolment earnings trigger or raising the contributions.
“Now is not the time to change things. [You] don’t want to distract people’s attention from the task at hand.”
