Small and medium sized employers (SMEs) often struggle to understand pension charges and need more transparency to help ensure auto-enrolment is a success, industry experts said today.
A report launched today by the National Association of Pension Funds and provider of the People’s Pension, B&CE, found that many SMEs can often be very unclear about the different types of pension charges that can apply.
The research, based on focus group interviews run by IFF Research, looked at what employers of all sizes thought were the important features of a pension scheme and focussed on how well they understand pension charges. It found that firms lacked knowledge and confidence, but were very interested in greater clarity and user-friendly guidance on charges.
SMEs are a key factor in ensuring that the landmark auto-enrolment reforms, which start on Monday (October 1), are a success.
Joanne Segars, NAPF Chief Executive, said:
“SMEs are a key target for auto-enrolment and this research found that they are supportive of the need to provide good pensions. We need to help them make the right choices so that their staff stick with their new pension.
“Clear guidance on charges can only help break down some of the barriers to understanding pensions. SMEs, like all employers, will also benefit from the work the industry is doing on a new Code of Conduct on charges.”
Jamie Fiveash, Director of Customer Solutions at B+CE, provider of the Peoples Pension, said:
“What is required from pension providers can vary across employers, but the research supports our experience in that ease of administration and a simple transparent charging structure is high on the priority list across all.”
Notes to editors:
1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
2. B&CE is a not-for-profit organisation, which operates for the benefit of its members and their dependents. Established in 1942 and founded in construction, B&CE’s current offerings include a workplace pension, employee accident cover, employee life cover, employee healthcare and holiday pay. Today it manages assets of over £1.8 billion and provides financial benefits to 200,000 individuals on behalf of nearly 6,000 corporate accounts.
For the past 30 years, B&CE has been providing workplace pensions to employers with transient, low to moderate earning workforces, both large and small. B&CE has been operating a form of automatic enrolment for over ten years through its stakeholder product.
In November 2011 B&CE announced details of The People's Pension, as an additional product to assist employers in complying with their automatic enrolment duties.
The People's Pension, a Super Trust, is a multi-employer scheme with independent trustees and has an AMC (TER) of just 0.5%. It is a hassle-free, flexible and portable workplace pension designed for people, not profit and is suitable for any organisation, large or small, in any sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]