Articles - Auto-enrolment – the calm before the storm

 By Jamie Clark, Business Development Manager, Royal London

  The adviser and pension provider markets have so far managed to keep up with demand and most employers have fully complied with their auto-enrolment duties. But some employers have struggled and have been subject to compliance action. Up to the end of September 2015, the Pensions Regulator’s powers have been used more than 3,000 times including 582 fixed penalty notices of £400 each.

 But the real challenge will come over the next 2 years or so when around 1.8 million employers reach their staging date. In that number will be lots of small employers with only a few members of staff. As a result, it’s likely that the provider market will contract for these smaller employers as they are not financially viable for some pension providers. In addition, it’s likely that the Regulator will need to use its powers more often as smaller employers are less likely to have access to the advice they will badly need. In an attempt to help employers, the Department for Work and Pensions has recently started a new education campaign “Don’t ignore the workplace pension” to educate employers that they need to give themselves plenty of time to plan for auto-enrolment.

 So as 2015 draws to a close we can say with some certainty that auto-enrolment has been relatively successful. But with so many employers yet to stage, it could just be the calm before the storm.