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Auto Enrolment - Choosing a Schmeme

Auto Enrolment - Choosing a Schmeme

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I was wondering how are AccountingWeb practitioners are advising their OMB Employer clients on choosing pension providers to fullfil Employer Enrolment duties? Most of our OMB clients do not have pension provisions for their employees. These clients are only interested now, in work place pensions simply to fullfil their AE responsibilities as an employer.

In this situation, do they need to be directed to a FSA to choose a scheme? This is likely to incur around £500 to £1,000. Or can general practitioners (non FAS registered) simply direct them to the Pension Providers available, say to a one with public service obligation and let the employers make the decision? In years to come will our employer clients be negligent of enrolling employees in a non-suitable pension scheme? Does going through a FSA alleviate OMB employers from such claims or at least minimise such risks?  

Some OMB clients do not have AE duties, because all the employees are directors. In such situation is simply letting TPR know sufficient?  Can these directors choose to opt in? Has a General Practitioner obliged to direct them to a FSA?

Thank you in advance, for your comments.

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By tom123
17th Jan 2016 08:41

You may want to try a search on this site

You may want to try a search on Aweb. The site search is a bit rubbish, but if you type the line below in to Google it will just pull up results from Aweb.

autoenrolment site:www.accountingweb.co.uk

As I understand it (and I work in industry, so only have our own scheme to deal with), advising an employer about the scheme is not actually regulated advice - bizarre though that appears.

Obviously advising individuals is regulated.

I also recall seeing that single person director companies are exempt, but not sure about the situation with more directors.

Doubtless others with more relevant experience will be along soon.

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By PracticePartner
17th Jan 2016 09:58

AE platform recommendation isn't "advice"

I was concerned about this as were others (see the other threads as tom123 suggests). Later I discovered that suggesting a platform isn't regulated advice, but of course your client could still blame you if something goes wrong. So I resorted to telling clients what platforms were compatible with our payroll bureau and leaving it to them.

The point about unsuitability is interesting, it is up to the employer to decide on the investment goals of the scheme (to the extent that the chosen platform allows this), but whether they have a duty of care to the employees to prudently manage their scheme is another minefield. Maybe that's a reason just to go with NEST?

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RLI
By lionofludesch
17th Jan 2016 10:34

I know .....

I know my clients will go with NEST because it's the cheapest option now that NOW and People's are charging fees.

They have no interest in how well the investment performs.  It's a major weakness in the Government's poorly thought out plan.

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By Smartie99
17th Jan 2016 15:51

Have a look at Smart Pensions

Free also and they seem to be trying to grow their market share - impressed so far :)

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By Willwo01
17th Jan 2016 14:35

Allow some choice
I see a lot of accountancy firms and the main consideration for those running payroll is how well the software works. It's far more efficient to be spending 10mins uploading files over an hour trying to sort out errors. From here it then makes sense to have a panel of say two or three providers you work well with, let's say NEST and a traditional provider such as Aviva - cheap vs. Premium. You do need to be clear other providers are available to ensure you follow TPR guidance and also have an audit trail to show it was the employers decision. Happy to talk more if you want to inbox me.

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By Henry Tapper
17th Jan 2016 17:09

I understand employers choosing on upfront cost or simply opting for NEST as a "safe haven" scheme. But if accountants are making reccomendations they may be held to account if things go wrong. Indeed employers may themselves be held to account and then pass the buck to the nearest adviser to hand- typically the accountant.

What is needed is an authorative source of information and a means to sign off a "reason why" letter that can stand as the end point of an audit trail.

Such a service does exist and if you search this site you will find it. 

 

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RLI
By lionofludesch
18th Jan 2016 13:30

Recommending

henrytapper wrote:

I understand employers choosing on upfront cost or simply opting for NEST as a "safe haven" scheme. But if accountants are making reccomendations they may be held to account if things go wrong. 

I'm not recommending NEST.  I'm not recommending anything.

I'm just saying I know which one the employers will choose.  They'll say "Why should I pay an up-front fee or a monthly charge to benefit someone else?" And - indeed - who's to say that NEST might not turn out to be their best option ?   A lot can happen in the next 30, 40, 50 years before the employees draw their pension.

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By Dan Woodruff
20th Jan 2016 08:53

In all honesty using an FCA regulated adviser is not the issue. Auto ENrolment is regulated by the Pensions Regulator, not the FCA. The only time regulated advice comes in to the picture is if the financial adviser gives advice to the employer or employee on regulated activities such as which investment fund to chose etc. 

Employers may get advice from advisers but only on TPR activities! 

The employer would be perfectly safe to chose any listed scheme from here: https://www.abi.org.uk/Insurance-and-savings/Products/Pensions/Saving-into-a-pension/Automatic-enrolment/Providers

This is the type of thing we cover in our free auto enrolment webinars.

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