Hitting firms with more red tape in a recession is 'crazy'
Small and medium-sized businesses will be hit with another "crazy" layer of government red tape from tomorrow when new rules on pension schemes come into force.
And business owners are furious that the Pensions Board is seeking to increase the administrative burden at a time when many firms are struggling to survive.
A new directive issued by the board requires all trustees of pensions to undertake fresh training at least every two years. For new trustees the training will need to be completed within six months of their appointment, after which it will need to be repeated every two years.
At a time when 425,000 people are out of work, and when an average of 20 firms are going out of business each week, the new regulations will not be welcomed by businesses around the country.
The introduction of compulsory trustee training further increases the obligations of trustees, or employers, in relation to the operation of a pension scheme.
It is believed many employers will review their existing pension arrangements to see whether there is an alternative method of providing retirement benefits for their employees. Independent financial expert James Fitzsimons said that while the principle of the regulations is sound, he said it is "crazy" to introduce them at a time when the country is struggling during the worst recession in living memory.
"At a time when the country is on its knees, small businesses are being hit with another crazy layer of bureaucracy. In principle, introducing more prudent management of pensions is a good idea but not when so many businesses are struggling to stay alive," Mr Fitzsimons, an accountant, said. "There seems to be no co-ordination as to how the State deals with small and medium-sized companies.
"On one hand you have Revenue not giving an inch and then you have agencies, like the Pensions Board, coming out with this stuff. Small businesses should be getting a break not more red tape," he added. As a result of the new directive, a number of pension providers are now charging up to €2,000 plus VAT to provide the trustee services to firms.
This is also seen as a further blow to small businesses around the country which, according to the Irish Small and Medium Enterprise Association, are "hanging on by their fingernails".