The Federation of Small Businesses (FSB) has hit out at government plans to not exclude the smallest businesses from automatic enrolment pension schemes.

The Federation of Small Businesses (FSB) has hit out at government plans to not exclude the smallest businesses from automatic enrolment pension schemes.

All companies will be required to enrol their staff into a pension fund from 2012, with the scheme forcing firms to pay an extra £3.2 billion a year.

The FSB is concerned that micro firms (organisations with ten people or less) will not have the expertise to choose a pension scheme for their staff, and that too many businesses are unaware of the legislative changes altogether.

The organisation calls for the government to raise awareness of the default pension scheme to ensure the ‘ticking time bomb’ doesn’t hit small firms without effective communication.

Mike Cherry, FSB policy chairman, says: ‘While we welcome 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.’

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Related topics: Pension schemes Automatic enrolment, Pension schemes