Provider Scottish Life could exit the Auto Enrolment pension market in 2015, as the looming ‘capacity crunch’ hits.
Speaking at the Personal Finance Society (PFS) conference, Scottish Life’s Business Development Manager Jamie Clark said a substantial amount of employers who leave compliance too late will end up in mass market schemes.
Mr Clark stated that many were reluctant to get the ball rolling on Auto Enrolment and that the capacity crunch – the term given to the time when providers will be too busy to take on more AE clients – would result in business going to NEST (National Employment Savings Trust) and its rivals, the Peoples Pension and NOW: Pensions.
NEST is the only scheme with a legal responsibility not to turn away business.
Clark said: “We are not a charity. We are under no obligation to help the government make this work. We could exit the market tomorrow if we wanted to, in 2015 that might happen.
“A lot of employers will end up in mass market schemes.”
Clark also highlighted the complexity of Auto Enrolment’s legal requirements. He said there are 15 sets of regulations, nine sets of guides from The Pensions Regulator and, ‘at his last count’, some 28 different categories of worker for employers to define.