‘Free’ AE Middleware from Product Providers

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For a while now many of the larger product providers have been providing auto-enrolment middleware with their schemes as a ‘free’ add-on for employers. This has been a feature of the AE market in its early years, but it is something that government is looking to regulate*. The view now is that the cost of compliance middleware provided to an employer to help run their business should not be charged to their employees through their pension product. The argument is the same, of course, as far as commission is concerned. The cost of complying with automatic enrolment requirements should be met by the employer, not the Staff.

While some of the large pension providers do not seem to want to distribute workplace pension schemes to ever smaller firms as they reach their staging dates, there are some that do and some of those still claim to be providing AE middleware as a ‘free’ add-on to their offerings. However, in the long run there are only two ways that such a ‘free offer’ can work; it is either genuinely free, or it is paid for in some way either by the employer or the employees.

It will not be possible to charge this to employees, so if there is a cost to the middleware employers will need to be billed directly for it. Some GPP providers do this already.

The Auto Enrolment waves start to build

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I think I really started something with my ‘Tsunami’ talk at the NMA conference in January this year. I suppose I meant to really, but it’s amazing how that story has grown.

In terms of the tsunami itself nothing’s really happened as yet; we’ve seen the big swirls as the biggest employers in the land have taken auto-enrolment on the chin, but that was never going to have anything other than a positive outcome. A disturbance far out at sea, that sort of thing.

No, the wave really starts to build from now on.

Auto-enrolment – a real opportunity to provide advice

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The other month I had the pleasure of discussing auto-enrolment with a number of high quality advice firms.  Since that time, I have been playing catch-up on the regulations with which employers will have to comply from their staging dates.

Although I was very aware of auto-enrolment, I guess I saw it as a hygiene factor. Make sure that existing schemes are compliant and hope that this cements the valuable relationship with the executives and directors. Job done!