Royal London calls for new employer duty to review automatic enrolment provider
Phil Loney, CEO of Royal London, has written to Pensions Minister Baroness Ros Altmann, calling on her to introduce a new duty on employers to undertake a periodic review of their workplace pension provider. Three years on from the launch of automatic enrolment, the largest firms are now beginning the process of 're-enrolling' their workforce. Royal London believe that this would be a natural point for firms to consider whether their original automatic enrolment provider is offering the best value and the best service for both scheme members and employers.
In his letter, Phil Loney writes:
"As the Office of Fair Trading found, employers often lack the capability or the incentive to assess value for money. Even if employers make a sound initial choice of provider there is no guarantee that the scheme will continue to offer competitive investment performance or high standards of member service into the future. It is vital that there is a vibrant pensions market where pension providers are held to account for both the price and quality of their products."
Royal London has long championed the creation of an additional, light-touch responsibility for employers, after taking appropriate advice, to review their workplace scheme's quality and suitability for their workforce.
Phil Loney continued: "It would not be in the interests of scheme members if the selection of an automatic enrolment provider was seen as a 'once and done' activity by employers. As a mutual pension provider our goal is to ensure that scheme members get the best value pensions available on an ongoing basis. A thriving secondary market where incumbent providers face a real competitive challenge would help to deliver that goal."
For further information please contact:
Director of Policy
0207 015 2556
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £83.1 billion. Group businesses serve around 5.3 million policyholders and employ 2,958 people. (Figures quoted are as at 30 September 2015).
Royal London has to date helped employers enrol more than 300,000 new workers into workplace pension schemes.
The Group is currently moving all of its UK and Ireland life, pension and investment businesses under a new version of the Royal London brand. The Group's independent wrap platform will remain branded Ascentric.