Insurers have started to turn down employers who want to expand existing schemes for auto- enrolment.
Professional Pensions reports :
Consultants JLT Benefit Solutions, Mercer and Hymans Roberston say they have seen clients denied terms by providers who do not want a mass of low-paid workers making statutory minimum contributions on their books. JLT Benefits Solutions projects director Mark Pemberthy said: “Insurance companies are starting to be selective about the types of population that they take into existing and new schemes.”
JLT Benefit Solutions head of defined contribution consulting Paul Armitage said insurers were also reviewing the charging structure on existing contracts.
Hymans Robertson head of DC consulting Lee Hollingworth said the development would lead to a rise in two-tier solutions. He said: “Insurers were willing to take on the minimum statutory business, but over the last couple of months – weeks even – we too have found that insurers are less inclined to take that business on and are becoming more selective. “I think the two-tier delivery system will become more prevalent so you will have employers who will have a solution for one group of their workforce and a solution for another group of their workforce where the provider was reluctant to offer terms.”
Mercer head of UK DC Paul Macro warned such two-tier schemes would leave employers and trustees in an awkward position and increase the administrative burden.
He said: “I can think of at least two examples that I have seen, where the provider says ‘look we want to keep your existing business, but we don’t want all of the auto-enrolment business’ – which I think puts schemes and trustees in a difficult position.”
The Association of British Insurers declined to comment.
INDUSTRY-WIDE PENSIONS GROUP PUBLISHES CODE TO HELP EMPLOYERS MAKE THE RIGHT DECISIONS
23 May 2012
A new Code of Conduct on the charges made on workplace pensions could help employers choose the best pension for their staff, a wide-ranging group has said.
HR Magazine reports:
The group is developing an industry-wide Code which will ensure all charges on defined contribution pensions are clearly and accurately stated in writing before an employer picks a pension scheme. The new Code could help employers who are new to pensions to secure the best deal when they start complying with rules to automatically enrol their staff into a pension. The group, which was formed by the National Association of Pension Funds (NAPF), launched a public consultation seeking views on the parameters of the Code. Feedback will help generate the final Code of Conduct, to be launched in late summer. Joanne Segars, chief executive of the NAPF, said: "We need to boost faith in pensions, but charges are a big concern for many people and often the information on offer is unclear. People need to see what is being charged and why, and in a language they understand. This Code could really flush out the detail on charges by making sure that the fine print gets magnified.
CIPP Policy News Journal
12/04/2013, Page 232 of 362
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