For immediate release: Thursday 17 September 2015
Workplace pensions provider, NOW: Pensions has today launched a consultation to give small employers the opportunity to say exactly what they want and need from their auto enrolment provider. Using feedback from the consultation, in January 2016 NOW: Pensions will enhance its proposition to specifically meet the needs of smaller firms.
Following initial conversations with a number of employers and their advisers, the new proposition is likely to include online support such as screen share and live chat, longer contact centre opening hours (evenings and weekends) and a named individual to support employers with any issues that may arise. For firms staging from 2016 onwards, there will be a monthly service charge of no more than £40 per employer. The exact level of the fee and nature of the proposition will be determined following the conclusion of the consultation.
The launch of this charge will not apply to any firm that already has an accepted contract with NOW: Pensions even if they are staging in 2016 or beyond.
According to figures from The Pensions Regulator, of the 1.8 million employers yet to stage from now until 2018, two thirds (1.2 million) employ between one and four workers while 16% (288,000) employ between five and nine workers and 17% (306,000) employ between 10 and 49 workers. Over 500,000 firms will stage in 2016 alone.
To handle the growing demand, NOW: Pensions has increased its contact centre capacity significantly and in November is opening a second office in Nottingham with the creation of 250 new jobs over the next two years. Many of these new jobs will be in front line client support.
NOW: Pensions recognises the needs of smaller employers are fundamentally different to the 54,000 employers that have already staged. Research* conducted in March 2015 with 269 employers yet to stage revealed that two in three (66%) don’t have an existing pension scheme while 8% have a stakeholder ‘shell’ scheme with no employees in it.
When it comes to selecting a provider for auto enrolment, one in four (26%) employers intend to seek help from their accountant, one in six (16%) are relying on their existing scheme provider and one in ten (12%) plan to search the market and do the research themselves. Just one in 20 (6%) of small and micro firms intends to seek help from an independent financial adviser.
Morten Nilsson, CEO of NOW: Pensions said: “When we entered the UK market in 2011, we came with a commitment to accept every employer and every employee with no minimum requirements. That commitment hasn’t changed. We want to keep the doors open for everyone and provide the right support but the market is becoming more challenging and we’ve been giving careful consideration to how we maintain this promise on a sustainable, commercial basis.”
Nilsson continues: “Unlike the companies that have gone before them, most small businesses do not have any in-house pensions expertise, they are also less likely to have the benefit of an adviser. As a result, smaller companies will undoubtedly need more guidance, not only as they go through the staging process but also on an ongoing basis.
“We want to offer all firms, regardless of their size, the help they need but to do this we will need to charge for our services. This consultation will pinpoint exactly what small employers want so we can develop our proposition to precisely meet their needs.”
The consultation runs from 17 September until 29 October and can be viewed here. NOW: Pensions is also running a series of focus groups with small and micro employers, advisers, payroll bureaus and accountants.
The outcome of the consultation will be published before the end of the year.
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Notes to editors:
* Research undertaken by BDRC Continental, an award-winning insight agency. Questions were put to 400 UK SMEs (up to and including 250 employees) via BDRC Continental’s monthly Business Opinion Omnibus. 269 of those interviewed are yet to stage. Telephone-based interviews with a nationally representative sample of senior financial decision makers across the UK, weighted by size, region and sector. Fieldwork dates 2nd to 12th March 2015.
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.