Scottish Life has decided to continue to offer consultancy charging for firms which are yet to reach their automatic-enrolment staging dates.
Pensions minister Steve Webb announced plans earlier this month to ban consultancy charging in all auto-enrolment pension schemes, following an “urgent review” of the charging method launched in November.
The provider will offer consultancy charging, where fees for employer advice are taken from employees’ pensions pots, on qualifying schemes ahead of employers’ auto-enrolment staging dates for pipeline schemes and new business.
Scottish Life says it plans to monitor the use of consultancy charging and regularly liaise with the Department for Work and Pensions to ensure its approach complies with the planned consultancy charging ban for auto-enrolment.
Firms which choose to pay for setting up auto-enrolment schemes via consultancy charging will have to switch to fees by their staging date at the latest.
Scottish Life managing director Ewan Smith says this approach allows employers to avoid “capacity crunch” problems as more companies hit their auto-enrolment staging dates next year.
Smith says: “Advisers have a vitally important role in making auto-enrolment a success, especially for small and medium sized businesses.
“Scottish Life has already set up a number of new schemes – with many more in the pipeline – on a consultancy charging basis. With many of these, the employer’s staging date is more than a year or two in the future. This approach benefits both the employer and the scheme members.”
He adds: “We have always seen consultancy charging as being an important part of building the transitional ‘stepping stones’ to a fee-based business model, where employers pay the adviser directly.
“Scottish Life’s promise is to continue to support advisers, in a variety of different ways, to help ensure good outcomes for employers and for scheme members.”