Personal accounts trustee can recover admin costs
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The personal accounts scheme trustee looks set to be given additional powers to use against employers which fail to comply with the scheme order and rules.
In a summary of responses to a consultation on the draft scheme order and rules, the Department for Work and Pensions and the Personal Accounts Delivery Authority propose a “broad power” to allow the trustee to recover additional admin costs from employers.
The document states: “Employers who persistently fail to meet the terms and conditions are likely to create additional costs for the scheme.
“Any costs of the scheme must be borne by all members. We believe it is important that all members are not adversely affected by the potential actions of a minority of employers.
“To address this, we propose to include a broad power in the scheme order to allow the trustee to decide on the desirability of recovering additional admin costs, the calculation of the additional costs and the method of recovery.”
Hargreaves Lansdown pensions analyst Laith Khalaf says: “This sounds like the trustee will have to do a policing and magistrating job as well. Normally, that would be down to The Pensions Regulator.”
Khalaf says trustees norm- ally have a duty to flag up non-compliance by employers but the proposals suggest that they will now be able to enforce additional payments.
Standard Life head of pensions research John Lawson says: “The idea of charging employers who fail to supply the correct information is daft.
If we charged employers every time they messed up, we would have no customers left.”
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Readers' comments (1)
Anonymous | 30 Oct 2009 3:10 pm
Interesting conclusions from Hargreaves Lansdowne and Standard Life. HL seem to think that if someone provides a service outside of existing contract terms, then recovering the cost of that service is a matter for the regulator? I thought the regulator was there to enforce compliance with regulation, not to chase up admin fees, which is what that power suggests. As for the SL comment, everyone charges their clients for messing up - in the contract based world it's all implicit in the AMC, in the occupational world it's in charges. it's not a surprise that PADA are looking at both approaches, if i wanted to run a scheme at 0.3-0.5% amc I wouldn't want some ham-fisted employer screwing up my cost projections.
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