Scottish Life considers money-back guarantee
Scottish Life is considering guaranteeing the auto-enrolment process for employers using its service, accepting liability for some fines incurred due to employer non-compliance.
The company said it is looking into the possibility of providing employers with a guarantee against fines levied by the Government for failing to adhere to employer duties that accompany auto-enrolment obligations.
Jamie Clark, business development manager at Scottish Life, said, “We are looking at providing a guarantee of auto enrolment compliance, but not covering the whole fine, perhaps just part of it.”
Potential fines run to £10,000 per day for the largest employers, down to £50 per day for those with four or fewer workers and are levied on the employer, regardless of whether they outsource the work to an adviser or provider.
Clark said the guarantee would be offered provided the employer and adviser passed the correct information to Scottish Life at the correct time, adding, “What we’re offering is peace of mind, which we think is a feature that will be very attractive in the market.”
Clark said that while lower-cost providers such as Nest, B&CE and Now Pensions coming into the market has made the company reassess its pricing, he believes that advisers and companies need to look at what is offered for the cost.
“They need to concentrate more on the added value offered by the advisers/provider solution and the extra benefits. It is wrong to compare providers just on cost, because it is not just about cost,” he said.
Aspects included in the employer duties include keeping the correct records, providing information to employees, having the correct scheme set up and not encouraging staff to opt out.
If an employer fails to comply they may be subjected to either a fixed penalty or an escalating fine that will accumulate day-by-day until the non-compliance is remedied.