Helping small and micro employers find a pension scheme for auto enrolment

By Louise Mulgrew | 6th March 2015 | 3 min read

In November 2014, The Pensions Regulator (TPR) came up with a proposal to release a list of pension schemes that were available to any employer regardless of size or employee numbers. A recent report from TPR shows the consultation and the actions as a result of it.

The consultation set out to find what risks were trying to be addressed by publishing a list of pension schemes.

Some of the key issues that were raised following the consultation on publishing such a list included:

Enabling employers to identify good quality pension schemes

One of the key things that may respondents suggested was that only good quality pension schemes should be allowed onto the list. The idea of using "Master Trust Assurance" as a measure of a "good quality" pension scheme however this was not available for Group Personal Pensions. Further initiatives may be developed to address this in the future.

Monitoring the list

Another element that was noted during the consultation was the need to monitor the list and make sure that the schemes that were on there, deserved to be so and were continually meeting the criteria. Discrepancies were found over whether this should be a periodical or a continuous process and should be managed objectively.

Requiring those schemes listed to accept all employers

A few of the respondents noted that there would be a difficulty in articulating the "universal acceptance" criterion in sufficient detail.

A "Whole of market" list

It was suggested that a list of all schemes in the auto enrolment market should be published to deter employers from assuming that their pension scheme wasn't eligible if it didn't appear on the full list. This would also then encourage employers to research the entire market before making their choice to find the most suitable scheme for them.

Impact on business advisers

A small portion of the respondents felt that the list could lead to a contraction in the pension scheme advice market under the premise "Why seek advice when there is a list telling me of suitable pension schemes?". Therefore it would be necessary to ensure that employers were communicated to that this was a non-exhaustive list and that by speaking to an industry professional, they may find more suitable means for their company.

References and presentation of the list

Presenting the list also proved to be a talking point. Ensuring that fairness was kept, the list was suggested to be order alphabetically, randomised or in order of pension scheme size. Calls were also made to ensure that the list was referenced widely in communications with employers.

TPR felt that in order to fully progress with the pension scheme list following the consultation, all of the issues that were raised should be addressed. Thus far, TPR have found it increasingly more difficult to find a consensus within the industry on how to present this list and overcome the challenges that were raised.

As a result of this, TPR have decided not to pursue the proposal with the proposal at this time due to the number of difficulties that is faced when it comes to overcoming the issues put forward during the consultation.

Some of the recent challenges made by existing pension schemes are that they feel that TPR are unfairly promoting the government backed scheme NEST. Do you feel that these claims are justified?

Auto enrolment continues to be implemented since the workplace pension reform in 2012. Selecting and allocating your pension provider is one of the main responsibilities needed when it comes to your auto enrolment process as this will help guide you through the rest of the implementation. 

Find out Nine auto enrolment responsibilities for employers with our free 10-page guide

Download the free guide