The Pensions Regulator has published guidance to help the 1.3m small and micro businesses preparing for auto-enrolment find a good quality scheme, after 20 per cent said they will not seek advice.
Its recent research suggested that one in five (290,000) employers will not seek advice when choosing a pension scheme, while one in 10 (130,000) do not know how to select a scheme, or think it will be difficult.
The regulator is updating the suite of information and tools on its website to make it as straightforward as possible for smaller employers, many of which have little or no experience of pensions, to get automatic enrolment right.
For the first time, there will be an online a list of ‘master trust’ pension schemes open to employers of all sizes and which have been independently reviewed to prove they are administered to a high standard.
The voluntary master trust assurance framework was developed by the Institute of Chartered Accountants of England and Wales in association with TPR to enable auditors to provide independent assurance on scheme quality.
Updates to website pages for IFAs and accountants have also been published.
Lesley Titcomb, TPR’s chief executive, said she strongly believes that the vast majority of small and micro-employers approaching auto-enrolment want to do the right thing.
“However, many will choose not to seek advice and will need additional support to meet their duties.”
She noted that their research shows large multi-employer pension schemes such as master trusts and group personal pensions are better placed to meet the standards necessary for good retirement outcomes.
“The list we have published today will help employers more easily identify master trusts that have demonstrated they can deliver quality standards, alongside other schemes including Nest [National Employment Savings Trust].
“I strongly urge other master trust schemes to follow the lead of those which have already committed to the voluntary assurance framework so that the choice of quality schemes available for employers continues to grow.”
Morten Nilsson, chief executive of master trust Now: Pensions, said that for employers and advisers seeking value for money schemes, today’s announcement is a big step in the right direction.
He said: “The next challenge will be to improve understanding and awareness of master trust assurance and the benefits to both employers and employees, otherwise there’s a danger its value will be overlooked.”
Darren Philp, director of policy at another master trust The People’s Pension, added: “The market has changed dramatically since auto-enrolment was being developed and there are now a number of players who are active in providing auto-enrolment solutions to smaller employers.
“We encourage the regulator to build on this announcement to ensure that from here on in it continues to promote choice of assured schemes at every step of the process.”
peter.walker@ft.com
