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Auto enrolment: Choose your provider carefully

11th Dec 2015
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The Bristol Friends of Automatic Enrolment chapter met recently to discuss master trusts and came to a collective conclusion that choosing a provider carefully was one of the most important decisions in the AE experience.

Smart Pension’s managing director Will Wynne and CTO Sam Barton valiantly fielded questions from the audience on all things master trust-related and the approach they apply in order to satisfy target customers.

From the many questions there was a general feeling in the room around a lack of transparency from the master trusts on fees.

There was also a lingering question over how many members are needed to make a master trust sustainable. Is an employer charge a part of that profitability?

One attendee said the value in an AE business model shouldn't be about now - it should be in five-to-10 years from now. If you choose one which does not have a sustainable model, and they may be slightly more expensive, pension scheme members could end up paying more in the long-term.

Others commented that there was a tendency among master trusts to characterise all micro businesses as the same: Some businesses really care about their employees’ futures and want the best pension plan for them whereas others just want to comply.

One of the big discussion points at the meeting centred on what would happen if a small master trust went bust and was not able to persuade another master trust to take on their clients.

Co-chair Steve Brice said if the scheme was wound up then members’ pots would be used to pay for the wind up.

“This will mean that choosing the wrong master trust could cost employees money and I am sure that lawyers are already working that one out ready for PPI to have run its course!” he said.

The added twist was that maybe government would put pressure on NEST to take on these members to avoid the loss of funds.

Brice commented: “Well if this indeed happened then what would members be charged going forward? If the existing master trust charged an AMC of 0.75% and no other fees then how will that continue in an environment where NEST customers are charged 0.3% AMC and of course a 1.8% charge when making contributions?”

Understandably members would be confused and may argue that they did not sign up for that.

There is no Friends of AE Bristol meeting planned for December, but a date will follow in due course for January 2016.

AccountingWEB has launched the No-one gets left behind campaign to alert as many accountants as possible to the obligations implied by auto enrolment. Read our simple eight-point statement which sets out the auto enrolment facts you need to know.

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Replies (2)

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By petersaxton
11th Dec 2015 17:23

Wow

I got a notification without the error message!

Is there an "Enemies of Auto Enrolment" chapter that I can join?

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By Henry Tapper
14th Dec 2015 07:11

Enemies of auto-enrolment v Friends of auto-enrolment

Perhaps we could get the sealed knot society to organise a full on battle somewhere outside Bristol where the Friends and Enemies of Auto-Enrolment could slug it out- and follow up with a few pints of stout Yeoman Ale,

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