Charity Finance Group warns charities not to be over-confident on new pension law

Auto-enrolment is a huge undertaking, says chief executive Caron Bradshaw, who has concerns about the capacity of small charities to comply

Caron Bradshaw
Caron Bradshaw

Small charities may be over-confident about their ability to handle new pensions rules, the chief executive of the Charity Finance Group has warned.

The auto-enrolment process, which is currently being introduced, will require all employers to offer a qualifying pension scheme or face a fine, and will involve almost all members of staff being automatically enrolled in pension schemes.

Larger organisations have already gone through the process, with 215 charities signed up by the end of 2013. Smaller charities will be required to sign up from 2015 onwards.

The CFG has launched a new good practice guide to the process, Auto-enrolment for Charities: a How-to Guide, in partnership with the pensions experts Foster Denovo, Premier Pensions and Stephenson Harwood, which highlights relevant guidance from the Pensions Regulator. It warns that charities might not be able to continue using their existing pension schemes and their existing providers.

Before launching the guide, the CFG surveyed 210 charities about auto-enrolment and found that 63 per cent of respondents felt confident about the process.

But Caron Bradshaw, chief executive of the CFG, said this confidence was at odds with the practical experience of those who had already gone through the process.

"Auto-enrolment is a huge undertaking for employers, particularly those with low pension take-up already," she said. "The additional cost of the scheme and administrative complexity will be major challenges. Evidence shows it’s vital that charities start thinking about auto-enrolment at least nine to 12 months in advance.

"We have particular concerns about the capacity of small charities to comply and the level of support that will be available to them at that point."

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