Fear for pubs over pension reform

There is growing concern over how pubs will deal with having to automatically enroll all staff into pension schemes.

For the first time employers will have to make pension contributions for eligible workers from 2012.

Those earning less than £7,000 a year are not covered by the scheme and employees can opt out.

The Federation of Small Businesses has voiced its "extreme disappointment" that there is no exemption for micro-firms — those with less than 10 employees.

It says the proposed changes are still complicated for micro businesses to put in place, and is concerned that these businesses do not have the expertise to choose a pension scheme for their staff.

FSB research shows that seven in 10 business owners do not feel confident in choosing a pension scheme for their staff.

It has warned that the cost and time spent on administrative work will damage micro firms and that the pension schemes set up by Government still do not meet the needs of micro firms — 95% of all UK businesses.

Severe disappointment​

"While the FSB welcomes initiatives to help people save for their future, the FSB is severely disappointed the Government has not listened to the needs of the UK's micro firms and has not made them exempt from automatic enrolment into pensions, which will cost employers in time and money," said FSB policy chairman Mike Cherry.

"We know that small firms do not feel confident in choosing a pension scheme because of its complicated nature, so are pleased that the Government has put in steps, such as the waiting period, to make the administrative burden slightly easier."

However, the FSB welcomed the fact that the Government would not make small businesses liable for the particular pension scheme chosen should something go awry and the introduction of a three-month waiting period before an employee is automatically enrolled.

Silver lining​

However, BII chief executive Neil Robertson said that it was not all bad news despite the extra time, effort and cost.

"I am slightly disappointed because it is another cost for pubs who can't afford it but we are in the business of improving the brand values of our trade and professionalising our industry.

"We know it is a tough economic climate and only the fittest and most adaptable will survive.

"You don't get by by doing the minimum. It is the same with the minimum wage and the tips debate. Do we want to be seen as an industry that does the minimum or one that embraces change to help us attract good staff."

Robertson said the BII would look at setting up some form of buying club to help licensees choose pension schemes.

Burden​

Lincoln based multiple operator Michael Kheng of Kurnia Group said he already offered a company pension scheme but no-one had taken it up across his seven sites.

"They either think it is too much paperwork or don't see their long term future in the pub trade.

"I disagree with Neil Robertson's view. It will make the small operator become an admin person. Small operators come into the trade because they love beer and love serving people at the bar, not because they love doing admin work.

"All the legislation hits the smallest guys hardest. It is another burden."

For more information on the changes to pension law, visit www.dwp.gov.uk​.

• How will the new pension laws affect your business? Let us know by hitting Post a comment​ below or email Ewan.Turney@william-reed.co.uk​.​