The proportion of UK businesses setting up their workplace pension after their deadline passed has reached a record high, analysis has revealed.
According to Aviva, during the second quarter of 2017 (April, May and June) almost one in five (18%) employers applied to set up their workplace pension with the provider after their staging date had passed. Those businesses put themselves at risk of a fine for not complying with auto-enrolment regulations and limit their options when choosing a workplace pension as not all providers will accept late stagers.
The data shows a clear rise in the proportion of companies missing their workplace pension deadline. Just over a year ago in the first quarter of 2016, only 1% of employers wanting to set up a pension with Aviva had passed their staging date; now and that figure has increased 18-fold.
At the same time, Aviva’s figures show the proportion of companies sorting out their auto-enrolment obligations more than two months in advance has seen a steady decline, from a high of 40% of applicants 12 months ago to just 19% in the second quarter of 2017. This is in some part to be expected as we approach the end of companies having to establish their pension scheme in accordance with a staging date. More recently formed – and therefore on average smaller – employers are now going through auto-enrolment.
From October this year the rules around setting up a workplace pension are changing. At the moment, existing companies are given a staging date by which time they must have a workplace pension scheme in place.
However, as announced by The Pensions Regulator, any new company starting up from the autumn will have to set up its workplace pension as soon as it takes on an employee.