Many arts organisations will face increased payroll costs of up to 3% as pensions legislation starts to affect smaller employers.

Photo of a pay slip

George Grinsted (CC BY-SA 2.0)

Only one in four employees working in small arts organisations received employer contributions to their pensions last year, according to ArtsProfessional’s recent salary survey. The figures suggest small arts organisations have a significant gap to fill if they are to be compliant with changing pensions legislation and avoid a penalty notice.

Just over a quarter of employees at organisations with a turnover of up to £750k or employing up to ten staff received pension payments last year. By contrast, around three quarters of those working for organisations with a turnover over £10m, or with more than 100 employees, received this benefit.

The provision of pension contributions is strongly related to age and seniority. Whilst 48% of those in full-time employment in the sector had pension benefits as part of their remuneration package last year, that figure fell to 39% among those earning less than £30k. Almost two-thirds of those aged over 55 received benefits, compared with 28% of those aged 18-24. Figures for part-time workers were lower still. Only 28% of those working part-time received pension benefits.

New rules require all workers to be subscribed to a work-based pension scheme and for employers to offer a 3% minimum contribution, although employees may opt out if they wish. Auto-enrolment staging dates for larger organisations have already passed, but for organisations employing fewer than 50 staff they are imminent, and those who do not sign up in time may have to pay a fine.

Liz Hill