A recent report by the Department for Work and Pensions (DWP) discovered that many employers are taking the minimum steps to comply with auto-enrolment rules and are turning to IFAs and accountants to outsource their pension duties.

This latest report found that employers who were new to the market were seeking just enough information to become compliant and that the process was almost always prompted by a letter from The Pensions Regulator (TPR).

The report also found that workers were not getting the information or even option sometimes, to save more for their retirement and instead taking the minimum contribution alone.

There has been a notable increase in employers who are now turning to IFAs and accountancy firms to help manage their AE obligations. Some employers have even turned to family members or colleagues who have experience with automatic enrolment.

Employers are now prepared to pay a management fee to an intermediary to ensure workers are not only getting the stipulated amount but also to deal with requests from savvy employees who wish to top up their pension plan or find a new provider.

The report also highlighted a lack of desire from employers to educate themselves on the AE rules and of those who conducted the process themselves, undertook limited research, usually focused on a visit to the potential provider’s website, and “skim-reading” the topic online. Very few employers spent any time researching the compliance requirements.

Many new employers are selecting the first pension offered, often opting for the National Employment Savings Trust (Nest), unless prompted to do otherwise by an intermediary or other outside source.

We here at OptEnrol can confirm the finding of this report as we are seeing people turning to us for help to ensure their AE obligations are being met and to help ease their already busy work load.

And let’s face it, everyone needs a little help sometimes.

It’s been 6 years since the introduction of automatic enrolment and in April there will be a second rise in the minimum contribution employers will be required to provide. As a result, companies and advisers are reconsidering their providers and as time has passed and experience grown, the cracks are beginning to show, and other avenues are being sought.

Aviva experienced an 80% rise in calls in 2018 requesting more or better auto enrolment support, the majority of which were from advisers.

Malcolm Goodwin, head of workplace savings and retirement at Aviva, said: 

“SMEs and their advisers are now starting to understand that when it comes to their auto-enrolment provider, they do have the freedom to switch they are starting to look at what is being delivered by the scheme they originally signed up to.”

In the beginning there was a sense of panic and the application of AE was fraught with confusion and uncertainty, only natural when we experience change but with understanding comes the ability to ask questions and seek better solutions.

Here at OptEnrol we are seeing a rise in enquiries as some advisers are no longer convinced that client requirements are being met. Rather than just rely on them to do this themselves, they realise that they could be offering more support and service providers such as OptEnrol could be the answer to the problem.

Great for us! We offer all of this as well as the peace of mind when using our complete auto enrolment service, where advisers can see their clients’ activity all in one place.

Those involved with providing AE assistance and companies who need to ensure they have everything in place now have the option and confidence to shop around and as they say, “knowledge is power”.

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