We all want certainty - and when it comes to auto-enrolment, advisers and their corporate clients want to know precisely what solutions their providers will offer. The wait will soon be over. We should have the final auto-enrolment regulations early in 2012, which means providers will at last be able to set out their exact solutions rather than their overall intentions.
But what else could influence how things turn out?Here are some of the main factors:
DWP review - the Work and Pensions select committee is currently reviewing NEST and auto-enrolment. Their scope is very wide and includes the impact of the contribution cap, the transfer ban on NEST, and changes to staging dates and contributions rates.
They could influence the final regulations as the government drafts them.
Kite marked schemes - the Pensions Regulator's interim report on good outcomes for members of defined contribution schemes raises the concept of kite marked auto-enrolment schemes.
We don't yet have any clear information on this but it seems likely that occupational and personal pension schemes used for auto-enrolment will need to reach high standards to be kite marked. More news is expected on this soon.
Electronic disclosure - the Department of Work and Pensions are due to announce changes to their disclosure requirements in the autumn. They could give the go-ahead to disclose information electronically and might cut down the amount of mandatory information provided to scheme members. However, the FSA appears unlikely to change the disclosure rules any further; and if they don't, this would lead to regulatory differences between occupational pension schemes and personal pension schemes.
Charges - journalists and politicians continue to express concerns about charging levelsfor group pension scheme members. There might even be a charge cap on auto-enrolment default funds. If not, there will still be strong political pressure to keep these charges as low as possible, with the likelihood that the Pensions Regulator would be able to act retrospectively against schemes it considers to have been charging too much.
Non-UK residents - as things stand, employers would need to auto-enrol non-UK residents, but because of the tax, legal and TCF complications many, if not most, pension scheme providers don't accept non-UK residents. Will the government, as a result of lobbying from Aviva and others, take steps to exclude non-UK residents from the auto-enrolment requirements?If so, when?
Aviva, like all other providers, can't finalise its solution yet though we are nearly there - our on-line support willhelp advisers and their clients decide on the most suitable qualifying basis, taking full account of the financial consequences, and give employers confidence that for each payroll run they are paying the right level of contributions and enrolling or re-enrolling the right people.
What we are concentrating on right now is helping advisers provide a high level of education and support for employers. The detailed auto-enrolment requirements arecomplicated and the fines an employer could incur for non-compliance are high. So employersare looking to advisers as the experts to help them get to grips with all the issues that affect them, and give them confidence they fully understand how the regulations will impact upon them.
This doesn't apply just to the basics like who can opt in and what employer contributions are payable in each of these cases, but also to more complex problems such as:
• whether they should auto-enrol employees on short-term contracts
• whether an individual pension plan could be used for auto-enrolment, and
• what to do about employeeswhose earnings vary considerably from one month to another.
Aviva's new auto-enrolment website for advisers aviva.co.uk/adviser/auto-enrolment/provides comprehensive information on a wide rangeof issues that advisers and employers have been asking us about, as well as an enquiry service in case you can't find the answer you're looking for on the site. We have also launched a similar site for employers http://www.aviva.co.uk/auto-enrolment/ that advisers can use with their corporate clients.
For advisers ‘being in the know really is being in control' when it comes to guiding clients through the complexity of auto-enrolment. And the greater theirlevel of support, the more they can demonstrate the professionalism and valuethey add.
Group Pensions Marketing Manager, Aviva
£1bn business since inception
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