Research from the Institute of Directors has found evidence that some small firms plan not to comply with their automatic enrolment duties.
Auto-enrolment began in September last year, with the UK’s largest employers legally required to offer staff a pension scheme which meets the Government’s minimum standards.
The reforms will be phased-in, with small companies not required to offer staff a pension until April 2017. Minimum employer contributions will eventually rise to 3 per cent of earnings in October 2018.
The Institute of Directors has surveyed 1,327 of its members to gauge how employers are responding to the changes.
The IoD says while levels of awareness and preparation are “broadly positive”, it has uncovered evidence that some smaller employers have no intention of complying with the new requirements.
One respondent says: “We plan to make every effort to avoid this piece of legislation, designed solely to allow the Government to steal more money.”
Another says: “We will not be spending any money doing something that we do not want to do. Catch us if you can.”
Both comments were from employers with fewer than 50 employees.
The IoD says: “This is new for 2013; suggestions of wilful non-compliance with the new employer duties were absent in 2011, making this a worrying development.
“We cannot infer from these comments that such attitudes will be widespread, but the research gives a sense that as employers – and particularly small employers – start to comprehend the enormity of the task in front of them, hostility to automatic enrolment might increase.”
The research also looked at how employers plan to pay for the extra cost of automatically enrolling workers into a pension scheme.
Some 42 per cent of respondents say they will use profits to meet the cost of complying with the new rules, while 24 per cent are planning to freeze or cut salaries.
Just 3 per cent of employers will make redundancies in order to compensate for the cost of auto-enrolment.