Govt urged to force employers to review auto-enrol provider

Loney-Phil-Royal London-2013

Employers should be given a new duty to review their pension provider three years on from the start of automatic enrolment, says Royal London.

In a letter to pensions minister Ros Altmann, the mutual calls on the Government to force firms to consider switching providers.

Chief executive Phil Loney says: “As the Office of Fair Trading found, employers often lack the capability or the incentive to assess value for money.

“Even if employers make a sound initial choice of provider there is no guarantee that the scheme will continue to offer competitive investment performance or high standards of member service into the future.

“It is vital that there is a vibrant pensions market where pension providers are held to account for both the price and quality of their products.”

Loney adds a “light-touch responsibility” for employers is needed to create a “thriving secondary market where incumbent provider face a real competitive challenge”.

Auto-enrolment was launched for the largest employers in October 2012 and will be fully rolled out by 2018.