Scottish Life backs away from money-back plan
Agreement will be put in place in auto-enrolment process, but no payment of fines
Scottish Life has “shied away” from offering a money-back guarantee on its auto-enrolment process after initially announcing this would be one of its main features.
The company told Money Management back in May that it was considering a guarantee should companies using its auto-enrolment service incur fines from the Government for wrongdoing.
But the company has decided not to offer this guarantee after all because it was found to be too complicated to put into practise.
Jamie Clark, business development manager at the company, said the level of work needed to achieve this did not make it practical.
“The timescales involved in investigating who is at fault should a problem occur does not fit with the timescale demanded to pay the fine to the regulator,” he said.
Instead the company, which revealed this week it has partnered with NEST, said it will put an agreement together detailing the duties of the adviser, the employer and Scottish Life in the process.
Clark said that having such “robust processes” in place should help avoid errors, adding, “We haven’t gone as far as saying that if we have done wrong we will pay.”
Employers can face fines for failing to provide information or not complying with regulations, with potential fees running to £10,000 a day for large employers and £50 a day for companies with four or fewer workers. Employers are liable for the fine regardless of whether they outsource the auto-enrolment process or not.
At the time of discussing the guarantee, Clark said, “What we’re offering is peace of mind, which we think is a feature that will be very attractive in the market.”