HR and payroll software provider Fourth has urged publicans to be aware of their pension responsibilities to staff, after a survey conducted by BigHospitality’s sister title Publican Morning Advertiser revealed that over half of them (51 per cent) don’t have their own pension and two thirds don’t plan to contribute towards one in the future.
Ben Hood, Fourth’s CEO, said: “The results of the survey are worrying. If licensees are unlikely to save for their own future, then they could be less aware of their legal obligations to provide a pension for their employees.”
Another survey conducted by Creative Auto-Enrolment showed that only 10 per cent of businesses in the service sector feel well-qualified to manage auto-enrolment preparations, leaving thousands of businesses at risk of getting fines.
The consultancy has outlined 33 different tasks employers need to do to comply with the legislation, and pointed out that at least 39 per cent of decision makers in service businesses admit to being in the dark on each and every one of them. According to the research, what employers are most concerned about is the responsibility burden of planning for their employees’ financial futures, with more than two thirds (69 per cent) saying that choosing a pension provider and plan for employees’ savings is one of the things worrying them the most.
Alarmingly, six in ten (61 per cent) companies in the service sector don’t even know when they need to be auto-enrolment ready. A quarter (26 per cent) admitted that they wouldn’t be able to determine their staging date without seeking advice, while 14 per cent didn’t realise they had to do it and a fifth (21 per cent) don’t even know what the staging date is.
David White, managing director of Creative Auto-Enrolment, said: “It’s now 18 months since the first employers staged but it’s clear from these findings that lessons are not being learned. But unfortunately it’s not a surprise – we are getting calls on a regular basis from companies who are completely unprepared for their staging dates – or have even missed them.”
Hood added that the fluctuating hours typical of the hospitality sector will make it challenging for employers to monitor employees’ wages, needs and requirements. “It is crucial that licensees and other hospitality businesses ensure they are aware of their legal duties, or risk facing prosecution and fines of up to £10,000 a day, per employee.”
Among the reasons cited in the Creative Auto-Enrolment survey to justify employers’ unpreparedness, lack of understanding seems to be the biggest barrier, chosen by 40 per cent of respondents. This was followed by a lack of resources (28 per cent) and time (27 per cent), with half of those surveyed estimating that preparing for their staging date has taken or will take over ten weeks.
The government’s automatic pension enrolment scheme started in October 2012, and requires all businesses to assess their workforce each pay period and enrol certain employees (eligible UK job holders aged between 22 and state pension age and earning more than £9,440) into a workplace pension scheme, unless the worker is already in a qualifying scheme.
A percentage of the employee's pay will be automatically diverted to a savings pot for their pension, and employers are also obliged to pay in, with the government adding an extra percentage through tax relief. The scheme has already been rolled out for large companies but small businesses employing one to 45 staff are due to start the process between July 2015 and June 2017.
Check out BigHospitality’s auto-enrolment checklist to help you prepare for the changes.