Pensions  

Auto-enrolment business being turned away

Advisers are reporting that early-staging auto-enrolment business is being turned away by pension providers, despite calls for smaller companies to get started early.

However, pension providers have denied that they are blocking business, saying they always look to help when possible.

Elliot Silk, head of employee benefits at English Mutual, said that providers are blocking business from employers wanting to enrol ahead of their staging dates.

“They are saying okay, this is a July 2014 staging scheme, we are not going to respond to you at the moment because we are focusing on our immediately staging companies,” he said.

“That is penalising employee benefit consultants and advisers that are organised, which isn’t really fair.”

But pension providers have told a different story, mostly stating that they welcome all appropriate business.

Jamie Fiveash, director of customer solutions at B&CE, owner of The People’s Pension, said several early stagers have already been set up and companies would not be turned away on the basis of staging early.

However, he added that some circumstances might prove challenging.

“It depends sometimes what they actually require,” he said, for example, if a firm’s staging date was 18 months away, they may have to wait a couple of months to start the process.

Aegon said its acceptance of a scheme depends on the circumstances but it would not usually turn somebody away, while L&G said that it would have to prioritise companies with earlier staging dates.

Nest, the government-backed pension scheme, has a legal obligation to accept anybody that wants to use it, although not until their staging date. It added, however, that it would welcome early adopters as it would ease the burden later on.

It is expected that around 30,000 employers will have to implement auto-enrolment between April and July next year, with industry-wide predictions of an impending capacity crunch.

As shown in the graph, providers are starting to enrol in hundreds of thousands already, although some are far ahead of others.

Signs are not good if providers are already struggling; despite providers saying there are no problems, reports from advisers on the ground that business is being refused or delayed cannot be ignored.