Small businesses feel auto-enrolment pension reforms will drive up costs.
The majority of small businesses feel auto-enrolment pension reforms will drive up costs.
According to a survey by the Association of Consulting Actuaries (ACA) of 404 smaller employers, 53 per cent of respondents say the government reforms set for 2014 will ’add significantly to costs’.
Companies not currently providing pensions say they do not principally because of cost (96 per cent) and economic conditions in their specific sector (82 per cent).
Smaller firms say the principal reasons why employees do not join existing schemes is, again, cost (84 per cent), a preference to spend (72 per cent) and a disillusionment with pensions (69 per cent).
Despite the concerns about costs, more than half (54 per cent) of small firms say they support auto-enrolment.
ACA chairman Stuart Southall says: ‘The cost of pensions to both employees and employers is the big issue that has prevented the extension of pension provision to date in the sector.’
Read the latest blog on pension reforms here.