Despite more than 4 million firms already having signed up to auto-enrolment there is a growing concern that some firms are becoming complacent and could face hefty fines for failing to join up.
Financial experts have warned that a number of SME s in the UK are ‘sleep-walking’ towards a pensions disaster – as thousands risk missing legally binding.
New research from solicitor’s Irwin Mitchell reported that high numbers of the 12,000 or so businesses, with between 62 and 89 employees, which were supposed to begin auto-enrolment on 1 July this year took up their right to ask for a three-month extension.
And that many of those companies subsequently missed last week’s final deadline and are now open to fines from the Pensions Regulator.
Speaking in the Independent, the Financial Columnist, David Prosser, said that the extended roll-out to smaller businesses made sense, but that the first 18 months in which only large companies had to meet the requirements, has left some smaller companies with a false sense of security.
He added: “These businesses have found it painless to make the transition to the new rules, so the assumption has been that everyone else would too.
“But hundreds of thousands of small businesses are now reaching their deadlines to begin complying with auto-enrolment.”
The fines for not meeting auto-enrolment can be quite harsh and include fines that increase the longer non-compliance continues, threats of legal action against offenders, and even criminal prosecution in the worst cases.
Mr Prosser said that SMEs needed to roll-up their sleeves and get on with the task sooner rather than later in order to avoid any chance of being penalised.