With minimum employer contributions under auto-enrolment increasing gradually up to 2018, it was inevitable that some larger employers with earlier staging dates chose to move provider as higher contributions opened up lower-charge alternatives and a more varied choice of services and products. Our latest insight looks at this secondary auto-enrolment market.
The first staging dates for employers under auto-enrolment came as early as 2012, some employers have now had over a decade to sample the service from their original chosen auto-enrolment partner.
Some of these earliest adopters of auto-enrolment may have had a bad experience with their provider as both employers and providers found their feet with the new requirements. They may have struggled with poor service in auto-enrolment preparation, ongoing administration, poor member experience or simply found their chosen scheme no longer suits their needs.
Many more options for employers have also come to market since those first employers ran up against their staging date.
With pension duties being a major part of employer responsibilities with high ongoing costs, it is likely that employers will regularly review their needs and many come to the conclusion that they wish to move auto-enrolment provider.
Where this occurs, it is known as the secondary auto-enrolment market.
Our data shows that all workplace pension providers cater for the secondary auto-enrolment market.
For most providers the terms and pricing models are the same as for new clients and those first hitting their staging date. However, Cushon appears to be looking to take a big bite out of this market by offering secondary auto-enrolment clients lower pricing models.
To make the process of transferring easier, all workplace pension providers have a dedicated team who will deal with the migration of the scheme.
For some providers there is an automatic process to assist with the transfer of scheme and member data, for others it is more of a manual process.
It is nice to see that no providers charge extra for this service.
The transfer process can take over a month or as little as a day. The most common time period is less than 30 days.
All workplace pension providers will produce all the relevant employee/member literature and correspondence for secondary auto-enrolment clients.
Most will produce this via both hard copy and electronically (via email and/or extranet). Secondary auto-enrolment members of Aegon Workplace ARC, Cushon, Legal & General, Legal & General Master Trust and True Potential will receive their documentation electronically only.
All workplace pension providers will also produce all the relevant employer literature and correspondence for secondary auto-enrolment clients. Secondary auto-enrolment employers of Aegon Workplace ARC, Cushon, Legal & General, Legal & General Master Trust and True Potential will receive their documentation electronically only.
Overall, our data shows that all workplace pension providers cater for the secondary auto-enrolment market with most taking under 30 days to effect.