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Pensions set to squeeze small firms

Small practices are bracing themselves for extra administrative burden following the news every employee will have to be enrolled into a pension scheme by the end of 2016

The government-backed proposals, to be launched in 2012, enforce automatic enrolment into workplace pensions.

The Department for Work and Pensions said it would do ‘all it can to ease the burden on employers’.

However Manuel Nogueira, chair of the RIBA Small Practices Group, said that without adequate preparation, the reform will be a ‘burden for small architectural companies,’ especially companies with fewer than ten staff and no personnel to implement the changes.

Joseph Fraher, owner of Fraher Architects, said: ‘The auto-enrolment pension reforms proposed by this government presents yet another challenge to the practitioner.

‘We would all be better off without the intervention of the nanny state that was so cheerfully adopted by the previous government and is slowly rearing its head in the next.’

Martin King, director of Douglas and King Architects, added: ‘If we continue to bury our heads in the sand there will be a lot of people with severe financial hardship at retirement age.

‘A three per cent employer contribution into a government-run pension scheme would mean a contribution of around £75 per month for an average Part 2 salary. Ultimately it will be the employee that will end up paying as there is only so much in the salary pot that can be paid out.’

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