Few companies ready for pension reforms

FEWER than one in ten employers have begun preparing for reforms coming into force next year that will oblige them to enrol staff into a pension scheme, it has emerged.

Under rules being phased in from 2012, workers aged between 22 and 65 and earning more than 7,475 will be automatically enrolled into their employer's existing pension scheme or, if there isn't one, into the National Employment Savings Trust (Nest).

Yet 67 per cent of small employers and more than one in ten large employers are unaware of the changes, according to research by the Pensions Regulator. Of those that were familiar with the reforms, three-quarters haven't discussed preparations and nearly half said they would leave it as late as possible before tackling the issue.

Automatic enrolment will come into force for the largest businesses next year, although most small employers will not have to comply until 2015 or 2016.

But while the research found that awareness is greatest among the largest employers, an alarming proportion have yet to prepare for auto- enrolment.

Fewer than one in ten employers have started planning, including fewer than half of large employers, with 14 per cent of the latter admitting they hadn't discussed it. Just 3 per cent of all employers and 13 per cent of the biggest claim to be fully prepared.

Charles Counsell, of the Pensions Regulator, warned employers against leaving their planning to the last minute. He urged firms to look up the "staging date" at which they need to be ready.

"Automatic enrolment is being introduced gradually to allow businesses time to prepare. The vast majority of small and micro employers will not reach their duty dates until 2015 or 16.

"Nevertheless, we are under no illusions as to the scale of the challenge. That's why we've already begun our education drive in earnest and have produced a range of information to help employers with different levels of pensions knowledge."