L&G imposes tech restrictions for new auto-enrol business

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Employers and advisers using Legal & General for automatic enrolment are being forced to go through one of two technology ‘middleware’ providers.

All new schemes with a staging date of 1 January 2016 will be required to use either pensionsync or ITM’s eAsE.

L&G does not levy an employer charge – unlike rivals the People’s Pension and Now: Pensions – but Pension Playpen director Henry Tapper says employers using L&G will see costs rise as a result of having to go through the two firms.

He adds only a small part of the market is served by pensionsync, while eAsE is targeted at employers with complicated payroll requirements rather than the mass market.

He says: “L&G’s move has not made a lot of people happy – I suspect in the short term this will drive a lot of people towards Nest.

“However, eAsE and pensionsync are now expanding away from their original specialist areas and I think this decision will actually be beneficial to L&G and the wider market.”

An L&G spokesman says: “As a leading provider for auto-enrolment, we have successfully evolved our proposition to meet the changing market requirements, which means tailoring our proposition for each segment of the market. As auto-enrolment moves to the next and final phase, technology will play a key role to effectively manage the huge numbers of small and micro employers impacted by auto-enrolment.

“We are committed to providing value for money auto-enrolment solutions, and having reviewed the market over recent months in conjunction with number of leading auto enrolment and payroll software providers, and have developed a new proposition to effectively service the micro employer market.”