From previous blogs, I have made it clear that Auto-Enrolment was in urgent need of a firm hand. With the abject failure to strongly police Stakeholder, I have watched the regulatory position with interest.
The recent high profile case of Swindon Town FC (the Robins) has brought this sharply into focus. Whilst not every case merits (or gets) this level of attention, there have been 6,746 separate cases of regulator intervention in auto-enrolment cases to 31st December 2015. These range from over 1,000 fixed penalty notices being served (at £400 each), to 21 inspections of premises taking place (the tanks very much on the lawn). With 100,000 employers enrolling each month, these numbers are going to increase significantly as we work through the micro-employer enrolment process. Read more »
The Pensions Regulator (tPR) shows concern over smaller employees leaving auto-enrolment too late.
It is now over 3 years since the auto-enrolment requirements were first introduced and the first employers staged. These large employers are approaching their first automatic re- enrolment date in 2016. Certainly, most signs so far have been positive. The National Audit Office’s October 2015 report examining the implementation of the auto-enrolment reforms highlighted among other points that the degree of employer compliance has been higher than expected, with 99% of employers submitting a declaration of compliance to the tPR. Read more »
The article below appeared in Pensions Expert on 23 November 2015, in the Informed Comment section of the publication.
The Chancellor George Osborne’s recent announcement that the Government’s objective to see the living wage increase to £9.00 by 2020 will have had many charity finance directors scratching their heads and wondering where the extra income is going to come from to fund this.
I suspect however that many will not as yet have got around to considering the pensions impact of the change, which for some will be very significant. Read more »
Spence & Partners latest blog for Pension Funds Online
It’s been 7 months since the new pensions freedom flexibilities came into effect, completely re-drawing the landscape of retirement savings. During that period, around £5Bn of cash has been withdrawn from the pensions system, both from cashing in small pots and drawing income out of larger ones. However, with an average “cash-in” value of around £15,000, Lamborghini dealers are still waiting to join the party.
Concerns about profligate retirees blowing their retirement savings have so far not come to pass, with general feedback from the industry that people tend to be quite sensible in the decisions they are taking over their retirement income. This is not particularly surprising – it seems a little unlikely that someone who has saved all their working life would suddenly spend the lot as soon as it become accessible; hard-working savers deserve more credit than that. Read more »
Whilst auto-enrolment (AE) has provided invigoration to the pension sector and many employees are engaging with pensions for the first time, there are still historic pension schemes hanging about creating headaches for employers that do not provide the best retirement options for members in today’s market. Spence is actively involved in assisting employers by investigating the possible options available to them to manage both their existing pension scheme liabilities and their new responsibilities under auto-enrolment.
Although liability management exercises have previously been seen to be more advantageous for the employer rather than the member, the dawn of Pension Freedoms from April 2015 has proved that these exercises can now be more attractive to members as well as employers. In addition to reducing an employer’s pension liability, these exercises also give members the opportunity to explore alternative and potentially more beneficial options, available to them in the pensions market. So it’s a win-win for everyone!
Employers – what do we need to know? Read more »
Following the horrendous suffering of WWI the French were determined never again to be invaded by Germany. There was a tremendous focus on fortifying the Franco-German border. A tremendous focus on building a line of concrete fortifications, obstacles, and weapons installations between themselves and the Germans. A tremendous focus on building the impregnable Maginot Line. In 1940 the German Army simply drove around it in their tanks and conquered France in about 6 weeks. Via Belgium.
Such is the folly of focusing on the wrong thing.
There has been a lot of worthy stuff going on around DC pensions of late. Regulatory guidance, upping governance, capping charges, auto-enrolment and, especially, pension freedom. Master trusts have a lovely new, shiny, impregnable assurance framework. You don’t have to hand your money to an insurance company any more. Read more »
2015 is a landmark year for the auto enrolment process. The 3rd anniversary for early adopters means the first tranche of re-enrolment processes will begin. With this in mind I have been considering how the process has developed for larger companies and the issues facing the smaller companies reaching their statutory deadlines.
The Regulator has published statistics surrounding key auto enrolment goals. The opt out ratio expectation has been reduced from 30% to 15% based on the experience to date. We are also advised that 99% of Employers have managed the process without the need for intervention. The initial Regulator study suggested it had only exercised its enforcement powers in 14 instances. However, a subsequent report confirms that 160 employers have been issued with the fixed penalty notices. It is clear that the larger employers have engaged in the process and using the path of least resistance approach, the membership has increased. Without wanting to temper enthusiasm it was never likely that large organisations would pose significant auto enrolment issues. These businesses will have specialists to guide them through the process. In addition their workforce will in the majority already have had access to a suitable workplace pension vehicle. Read more »
The Future Influencers celebrated its one year anniversary with an event in one of @Waterloo’s Alice in Wonderland inspired rooms. Although the Mad Hatter was unavailable, luckily, we had the next best thing, with Angela taking the role of chairperson. In true future influencers tradition the meeting was attended by a mix of familiar faces from prior events and several new attendees brought along by colleagues to join the discussion for the first time. As one of the first time attenders myself I can attest to the welcoming nature of the group and I look forward to coming along to many more in future. Read more »
There has been a lot of commentary in the press recently about employers’ obligations in relation to auto enrolling their staff into a suitable pension arrangement. Many of these articles seem designed to create panic at businesses who may not have got round to considering how they will implement auto enrolment yet.
We at Spence & Partners think panicking about auto enrolment is a very bad idea. Indeed, we think it’s such a bad idea that we thought we should put the words “DON”T PANIC” in big red letters at the top of this note.
Just so it’s clear where we stand on the point. Read more »