More than half (56%) of small and medium-sized employers (SMEs) surveyed said they do not know what auto-enrolment is or are not aware how it applies to their organisation, according to research by RSM Tenon.
The RSM Tenon business barometer, a quarterly survey carried out by YouGov among organisations with between 100 and 499 employees, found that a further 56% of respondents do not realise their employment costs will rise within 18 months due to the legislation.
Only 16% of respondents have detailed plans in place for auto-enrolment. This rises to 22% among respondents with staging dates within the next 18 months.
The research also found:
- 40% of respondents do not offer a pension at all, and a further 5% offer a pension but no employees take it up.
- 19% of respondents with more than 250 employees do not currently have employees enrolled in a pension scheme.
- 30% of respondents that do offer a pension scheme have between 1% and 75% of employees in the scheme, while 21% have more than 75% of employees in the scheme. A further 45% of SMEs to offer a scheme claim this has no members, while 5% of SMEs do not know how many staff are pension scheme members.
- 27% of respondents did not know what impact auto-enrolment would have on their employment costs and another 27% overestimated the cost of compliance.
Mark Wilson, financial management partner at RSM Tenon (pictured), said: “This research demonstrates, despite the millions of pounds of public money spent on TV advertising promoting this sweeping and complex legislation, there is significant confusion by SMEs as to its impact on their [organisations].
“We hope the report acts as a wake-up call to [employers] to act now and seek some advice, as far ahead of their staging date as possible, to ensure they can navigate through the legislation, assess costs, develop pension strategy, avoid significant fines and continue to comply with the legislation going forward.”