07 Oct 2014

Auto-Enrolment 'cherry picking'

Auto-Enrolment 'cherry picking'

Peter Mutch, Corporate Benefits Director, comments that as we go into 2015, the problem of 'cherry picking' will worsen as fewer providers actively participate in Auto-Enrolment. 

Peter Mutch, Corporate Benefits Director, comments that as we go into 2015, the problem of 'cherry picking' will worsen as fewer providers actively participate in Auto-Enrolment. 

A staggering 93% of Advisers say Pension Providers are 'cherry picking' auto-enrolment business according to new research conducted by independent financial researcher Defaqto on behalf of 'NOW: Pensions'*

Of the 244 Advisers questioned by Defaqto, just 8% believe Pension Providers have effectively managed demand for auto-enrolment services so far this year while over two-thirds (68%) claim that some have managed while others haven’t. 

When asked about the main issues they encountered, aside from 'cherry picking' business, the main factors advisers gave were: 

  • Providers’ systems are not as efficient as they should be (58%); 
  • Providers are changing their acceptance criteria (55%); 
  • Increasing volumes are causing service delays (49%); 
  • Providers have been withdrawing from the market (47%);
  • A lack of effective communication between payroll and pension providers (47%); and 
  • Providers’ telephone support not as efficient as it should be (37%) 

Looking ahead, over half (55%) of Advisers lack confidence in Pension Providers’ ability to handle the demand for auto-enrolment services next year. The main reason cited by 84%  was that volumes are so huge it will be virtually impossible to effectively manage it, while nearly two-thirds (64%) say increasing numbers of providers will withdraw from the market putting increased pressure on remaining players. Over half (55%) expressed concern that Pension Providers’ systems aren't as efficient as they should be. 

Peter Mutch, Corporate Benefits Director

* Research conducted online by Defaqto in August 2014.

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