This month, the first tranche of small firms with fewer than 30 employees has started the auto-enrolment process. However, research shows that one in four of all businesses who are yet to stage haven't given any thought to how they'll find a provider.
The staging dates for businesses with fewer than 30 employees are staggered over the next two and a half years. There are more than 1.2 million employers with fewer than 30 staff and over 500,000 will have to comply by the end of 2016.
New research from NOW: Pensions has found that 27% of these small businesses have not even started to think about finding a provider. However, this is an improvement on 2014 when 44% of SMEs surveyed said they hadn't thought about it.
Complacency is a part of the problem, according to NOW: Pensions. Its research has found that 52% of those businesses who are yet to stage don't think they'll have any problem finding a pension provider and only 9% are concerned that providers might "cherry pick" businesses.
Where small firms have thought about finding a provider, 26% intend to seek help from their accountant, 16% are relying on their existing scheme provider and around one in ten (12%) will search the market and do the research themselves.
However, not all pension providers are willing to work with the smallest firms.
Morten Nilsson CEO of NOW: Pensions said: "While most employers are confident that pension providers will be happy to accept their business, the reality is that not all providers will be willing to accept all employers and all employees on equal terms. If you are planning to rely on your existing provider, talk to them early to check they are willing to help."
A lack of understanding about what's involved is also a big issue for SMEs, according to the survey. It found that 34% of the SMEs surveyed admitted they don't understand how auto enrolment minimum contributions are calculated.
Planning ahead is essential, says Nilsson. "Auto-enrolment is complex and the longer you leave yourself to plan, the easier it will be. Business owners need to wake up to the reality that if they don't get this sorted, they could face fines of up to £500 a day. Auto-enrolment is fast becoming a reality for thousands of firms across the country and there really is nowhere left to hide."