Half of firms have not finalised new pension vehicle details
Over half of Northern Ireland businesses have not yet finalised pension details for a new auto-enrolment scheme being introduced, according to a survey.
Under the Pensions Act 2008, from October 2012 and phased over a period of five years, eligible employees will be automatically enrolled into their employer's workplace pension schemes, without any active involvement and with mandatory contributions paid by both the employee and employer.
Pensions and employee benefits consultancy Xafinity said a recent survey revealed 56% of businesses in Northern Ireland have yet to select the pension vehicle to be used for auto-enrolment.
The research was completed by over 70 business owners, finance directors and HR, payroll and pensions professionals in June 2013, who registered for the Xafinity Auto-enrolment Conference.
And 59% of respondents said that they were unsure whether their current payroll and HR systems would address the increased categorisation of employees and maintenance of audit trails required for auto-enrolment.
The Pensions Regulator published its compliance and enforcement strategy in June 2012, which states employers failing to comply with their new duties will be subject to statutory notices, penalties or escalating fines.
The regulator will have the power to issue a fixed penalty of £400 to an employer, as well as an escalating penalty at a daily rate. These daily penalties are set at a level to fine an employer the equivalent cash flow benefit gained from non-compliance, and range from £50 for small employers and £10,000 for employers with more than 500 workers.
Geoff Clarke, director of Xafinity in Belfast, said it was worrying that a high percentage of businesses have yet to address the key issues around auto-enrolment.