MPs told smaller employers can’t cope with AE

Concerns were raised in parliament today (19 November) over the administrative burden which will be placed on smaller employers as their respective staging dates for auto-enrolment draw closer.

The majority of an industry panel stated that simply because larger employers had coped with the administrative challenges presented so far, did not mean that smaller employers would cope in the same manner, in part due to a lack of resources.

Speaking today at the first evidence session of an enquiry into the progress of auto-enrolment and other pension reforms, Judith Hogarth, interim head of employment and pensions at the Engineering Employers’ Federation, said: “The fact that auto-enrolment has gone relatively smoothly for big employers does not mean it will do for smaller employers.”

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Dr Ros Altmann, independent pensions expert and consultant, echoed concerns “about being lulled into a false sense of security” and said that if bigger employers were struggling with the administrative burdens of auto-enrolment, then smaller firms would too.

Mike Cherry, national policy chairman for the Federation of Small Businesses, echoed concerns around the amount of admin on the horizon, stating that “larger employers have the resources” but with “small and micro employers it is ‘me and you’ that have to choose a pension.”

Marcus Mason, policy manager for employment and skills for the British Chambers of Commerce, added that the main auto-enrollment challenges lie ahead. “It is important that the regime focuses on being as simple as possible for small and micro employers.”

He urged that the regime should not include any complex changes, for example updating the thresholds for entry, which at this point in time could add an extra layer of complexity.