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Helping small and micro employers identify a pension scheme for automatic enrolment

Open date: 19 November 2014
Closing date: 01 December 2014

Consultation on a proposal to publish a list of pension schemes on The Pensions Regulator's website that are directly available to any employer, irrespective of how many workers they have or how much they pay them.

Consultation response

Background

Research carried out by the Department for Work and Pensions reveals that 48% of small and 79% of micro employers currently have no pension scheme and will have to choose a new one as they prepare for automatic enrolment.

Our own research suggests that:

  • around one in five small and micro employers say they will be self-reliant, ie they won’t or are unlikely to seek advice (approx 290,000 employers)
  • around one in ten will be self reliant and don’t know how to select a scheme or think it will be difficult (approx 130,000 employers)

We are aware of 30-40 providers who offer a scheme for automatic enrolment. Of these, a much smaller number of schemes have indicated they will not reject employers on the basis of size or low value. Even fewer schemes have indicated they will accept all employers who approach them.

In July, we sought the views of schemes and other pensions-related organisations about the significance of the problem and what might be done to address it. There was strong consensus that the risk was real and that, in spite of a number of helpful market developments, some market failure was likely. Most schemes and organisations proactively suggested intervention by an independent body.

In the light of the evidence, feedback from stakeholders, and risk and economic analysis, we propose to publish on our website a list of pension schemes that are directly available to any employer, irrespective of how many workers they have or how much they pay them.

The consultation document below summarises the evidence of this risk and goes on to describe the proposal and rationale behind it in more detail. The final section explains how to give feedback.

Consultation documents

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