Automatic enrolment  

SMEs value advice when choosing AE provider

SMEs value advice when choosing AE provider

Small and medium-sized businesses believe good advice is crucial when choosing an auto enrolment provider, according to a survey.

Workplace pension provider Welplan Pensions spoke to senior decision makers at SMEs and found 35 per cent thought a personal recommendation was the main reason for choosing a particular provider.

This was closely followed by the provider offering straightforward administration (30 per cent) and by good customer service (27 per cent). A mere 25 per cent said they had chosen their provider because they had an existing relationship with them.

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Welplan had surveyed 500 SMEs who use more than 28 different master trust providers in September and October 2018. 

Bruce Kirton, chief executive officer, said: "Advice is crucial for SMEs when they select an auto enrolment partner. Business leaders, especially if they have operational responsibilities, want a recommendation to help them navigate the complexity of workplace pensions."

He added in the future investment options would also play an increasingly important role to people.

"Not only will default fund design have to incorporate responsible investment criteria but we need a range of imaginative at-retirement funds," he said.

Auto-enrolment was introduced in 2012 and was phased in over a number of years, depending on a firm's size, starting with large employers and moving on to SMEs.

Figures released last year showed one in four small firms (25 per cent) had missed their deadline for auto-enrolling their staff into a pension scheme in the first quarter of 2017, up from less than one in five (18 per cent) in Q3 2016.

In September, integration platform Pensionsync warned of widespread errors in the data employers send to providers on the auto-enrolment contributions of their staff.

The firm warned greater attention needed to be paid by pension administrators and employers when processing the data and called on The Pensions Regulator to put regular data accuracy checks in place.

Venilia Batista Amorim is a freelance writer for FTAdviser