Low-cost providers have demanded The Pensions Regulator rephrase references to the National Employment Savings Trust in its letters to employers.
TPR is embarking on a round of communications with employers in the run-up to auto-enrolment. The series of two letters will arrive 18 months before the employer’s staging date, followed by a 12-month letter.
A paragraph in 12-month letter reads: “If you need to set up a new pension scheme, a number of pension providers are offering schemes suitable for automatic enrolment including the National Employment Savings Trust.
“NEST has been established by the government to ensure that employers including those that employ low to medium earners can comply with their automatic enrolment duties. NEST has a public service obligation which means it must accept all employers that apply to join it.”
NOW Pensions chief executive Morten Nilsson said TPR was providing NEST with “free advertising”.
He said: “I don’t understand why it’s necessary to advertise for NEST in this way because it signals that NEST is the more flexible solution or the default solution that you should consider.”
B&CE director of customer solutions Jamie Fiveash said he would raise his concerns with TPR and hoped to see the letter rephrased before it is sent to smaller employers.
He said: “We understand that NEST has a public service obligation so to some extent the regulator does need to mention them but we have concerns regarding the wording and the way it’s done.”
A spokesman for TPR commented: “In 2010, the DWP’s independent Making Auto-Enrolment Work review recommended that in its communications TPR make employers aware of the existence of NEST and, in particular, its universal service obligation.”
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