Pension problem looms for small employers: says report

There has been quite a lot of speculation about whether Personal Accounts will actually get off the ground. Although the timescale of launch isn’t cast in stone, there are probably less than 1,000 days before some form of commencement.

So, the latest research from DWP is alarming, if not unexpected. Focusing upon small employers with less than 50 employees, key findings were:

There was a very low awareness of the pension reforms among all the small employers
Those who did have some knowledge of the reforms prior to this study said they had been made aware of the legislation by their accountants; no-one had heard about the reforms from any other sources.
Employers in this study thought that they were unlikely to take any action until about 12 months prior to implementation.
Although there was broad support for the general idea of a ‘saving culture’ among small employers, the economic climate at the time of the fieldwork had an impact on their attitude towards the reforms.
Many were considering how to diversify their business in order to survive the recession. Because of this focus on remaining in business there was little enthusiasm for any legislation that would increase an employer’s costs.
There was also reluctance to contribute company money into pension schemes due to a lack of confidence in their performance, and in financial services as a whole.
These views were seen across the range of industries, company size and pension provision, although companies already contributing to a company pension were less negative in their views.

What was equally revealing are the reasons why small employers do, or do not, offer a pension scheme - for those see Section 2.4 on Page 19 of the report. Very illuminating.

See:

Research Report No 617: Understanding small employers' likely responses to the 2012 workplace pensions reforms: Report of a qualitative study (DWP)

(88 pages) Synopsis (html-1 page)