For immediate release: Thursday 5 March 2015
Morten Nilsson, CEO of NOW: Pensions comments on The Pensions Regulator’s consultation response – Helping small and micro employers identify a pension scheme for automatic enrolment.
“The news today that The Pensions Regulator (TPR) won’t be publishing a list of pension schemes that are directly available to any employer for auto enrolment is a major disappointment and a serious blow for small firms trying to comply with the legislation.
Research* carried out by The Department for Work and Pensions (DWP) shows that around one in five small and micro employers won’t seek advice on auto enrolment and will be making their own pension scheme decisions – this equates to around 290,000 employers.
Of those that intend to make their own decisions, around one in ten don’t know how to select a scheme or think it will be difficult – this equates to around 130,000 employers.
The consultation TPR launched in November 2014 clearly identified that there was a risk that these employers might struggle to find a suitable scheme for auto enrolment and outlined measures to address this issue.
It’s a great pity that despite the majority of consultation responses being supportive, TPR encountered obstacles that meant it was unable to find a way to get this pragmatic initiative off the ground.
The industry, NEST, DWP and government should all be lending their support to any measures that will help employers identify high quality schemes and ease capacity constraints in the market.
Starting in June, employers with fewer than 30 staff will reach their staging date and next year over half a million employers will have to comply with the legislation.
The 2016 market presents a huge challenge and giving employers access to a list of providers that accept all employers would have been hugely beneficial for all concerned.
It is foolhardy to think that NEST will be able to handle every employer and taking action now to help channel these firms to the right places is critical otherwise we run the risk of a pensions train crash which would seriously derail confidence in auto enrolment.
A list would have helped employers avoid wasting their time with providers that aren’t interested in their business, supported those that are committed to serving the whole market and helped manage the vast volumes of employers that will be seeking a scheme.
One of the major challenges we face is employers coming to us late – either in their month of staging or after their staging date has passed. In many circumstances this is due to them being let down by another provider at the eleventh hour.
As a trusted source of information on auto enrolment, The Pensions Regulator has considerable influence. It has direct communication with every company about auto enrolment but has only ever actively promoted NEST.
The publication of a list of providers would have helped to level the playing field and encouraged employers to think more carefully about which scheme is best for them and their employees.
I hope that TPR honour its statement to publish a separate list of all master trust schemes that hold the independent assurance framework as this will at least signpost employers to high quality master trusts**.”
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Notes to editors
NOW: Pensions www.nowpensions.com @nowpensions
NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.
A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.
In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.
In January 2015, NOW: Pensions achieved independent assurance of scheme quality in accordance with the new master trust assurance framework AAF02/07 introduced by The Pensions Regulator (TPR) in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW).
The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:
- Jocelyn Blackwell, founding partner Dunnett Shaw
- Christopher Daykin, former Government Actuary
- John Monks, member of House of Lords and former General Secretary of ETUC and TUC
- Win Robbins, former Head of European Fixed Income at Barclays Global Investors
- Nigel Waterson, former Shadow Pensions Minister
Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.