“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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