Under embargo until 00.01 Thursday 3 April 2014
New research*, from workplace pensions provider NOW: Pensions reveals that four in ten (44%) small and medium sized companies haven’t given any thought to how they’ll go about finding a pension scheme to comply with the new auto enrolment legislation.
Over a fifth (22%) intend to use their existing pension provider for auto enrolment. This comes despite growing concern that some providers will not support smaller employers’ auto enrolment needs.
Research** conducted with 264 IFAs at the end of last year highlighted this concern with 86% stating that they anticipate growing numbers of pension providers will not offer their auto enrolment schemes to SMEs.
A significant proportion (14%) intend to get help from their accountant and 5% are going to consult an IFA. A small proportion (4%) are going to search the market and do the research themselves. Only 2% have already made a decision and secured a scheme.
Morten Nilsson, CEO of NOW: Pensions said: “Companies planning to rely on their existing provider are taking a gamble. The reality is not all pension providers are happy to accept all companies and all employers on equal terms. The upshot of this is day after day we hear of firms who’ve been let down at the last minute
“Speak to your existing provider sooner rather than later so you know where you stand and make sure you have alternative plans in place. NOW: Pensions accept all employers regardless of size or the nature of the workforce.”
Despite a large proportion of SMEs admitting they are yet to think about their pension scheme, over half (57%) of firms surveyed think that their choice of pension provider is either important (33%) or very important (24%). Only 8% think it is unimportant.
Four in ten (40%) believe offering a good quality pension scheme will help with employee retention and nearly a third (32%) think it will help to improve the attractiveness of their company to potential employees.
Nilsson continues: “Selecting the right pension scheme for auto enrolment is important and has long term implications for employees. Taking time to review the options that are available in the market is sensible and planning ahead will help to keep stress levels to a minimum.”
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Notes for editors:
*Research undertaken by BDRC Continental, an award-winning insight agency. Questions were put to 450 UK SMEs (up to and including 250 employees) via BDRC Continental’s monthly Business Opinion Omnibus. Telephone-based interviews with a nationally representative sample of senior financial decision makers across the UK, weighted by size, region and sector. Fieldwork dates 3rd to 13th March 2014
**Research conducted online with 264 advisers by Defaqto between 25th November and 5th December 2013.
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.
The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:
- 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
- Imelda Walsh, former Group HR Director of Sainsbury’s
- 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.