The Government is being urged to set up a dedicated information service to help small and medium-sized employers navigate through automatic enrolment.
Last month, pension experts raised concerns about whether SMEs will access financial advice ahead of their auto-enrolment staging date, given that the FSA has said a consultancy charge cannot reduce the value of an employee’s pension contributions below the minimum set out in legislation.
These fears were compounded by a letter from pensions minister Steve Webb to the Association of British Insurers threatening to ban consultancy charging for auto-enrolment.
Hargreaves Lansdown head of pensions research Tom McPhail (pictured) says: “There is uncertainty about consultancy charging and how the smaller employer market is going to be served ahead of their auto-enrolment staging dates.
“As we move into 2014 and beyond, the industry is not really interested in serving those employers, and Steve Webb is saying they should not be paying for financial advice for auto-enrolment.
“We have The Pensions Advisory Service to provide a free service to individuals, so why not have something similar to support auto-enrolment?”
McPhail says the cost of the service could be met by a levy on the financial services industry or a grant from the Department for Work and Pensions, or both.
Keyte Ltd director Robin Keyte says: “Something along these lines might be useful for the really small employers. TPAS does a very good job and I think it could be involved in providing information to companies who do not get financial advice.”