The Regulator makes it easier for micro-employers to auto-enrol


Charles Counsell

Charles Counsell spoke at the Regulator’s provider conference on Tuesday (30th June).  These are my notes of what he said and there may be some minor inconsistencies. I hope to post a slide-share link to his slides when they are published as the Pension Regulator are clearly forging ahead.

He explained the Regulator’s position on employers who have no eligible jobholders (and no entitled or non-eligibles looking to join the workplace pension scheme.

If you are the boss and find yourself with a notification from the Regulator that you are staging auto-enrolment , you do not have to set up a shell scheme. Indeed the Pension Regulator was adamant, you should only set up a scheme, when you have demand for one.

If you have nobody to auto-enrol, do not set up a shell-scheme.

This marks how far the Regulator has come from the days of Stakeholder Pensions. In 2001, employers were told they had to set up a scheme and – if they did- their members would come. They set up schemes, nobody joined them and everyone said “what a waste of time”.

According to Charles, as many as 35% of the 1.3m employers still to stage will have nobody to enrol reducing the number of decisions on pensions to less than 1m. Before we heave a sigh of relief, 1,000,000 is still around 7 times the total number of employers paying into staff pensions at the moment!

But not having to make employers go through the motions suggests a new approach from the Regulator to what it calls the “micro micros”. We welcome this pragmatism

The Regulator’s research also suggest that the “back end of the initial staging project” will be  much bigger than expected with a  lot more newly born companies (since 2012) and a lot  less “deaths” (company failures). The Regulator is still checking numbers with Biz but now things  there are many more employers in the system than had previously been thought.

What’s becoming clear is that the letters the Regulator have been sending out all year have been a great success. The last letters go out this week and the Regulator reckons their letters have increased awareness from 65 to 77% for micros

Their research suggests that awareness of auto-enrolment is higher for the 2017 group of employers  than the 2016 group – (anyone who knows why please answer on a postcard to Napier House).

The micro employers are getting it!

The Regulator also has some interesting news on the trial group of micros employers staging in June 2015 (now!)

June stagers have a  96% awareness of their duties , 8% aren’t confident they are going to get there in time (a slightly higher number than previous groups).

Latest research suggests that  accountants are getting there. 86% of accountants surveyed know what auto-enrolment is about. For Book keepers, the numbers are at 80% (up from 29% in 2012). Interestingly there is increased interest too . Accountants increasingly see AE as a business opportunity (as do book-keepers), it’s compliance with the operational challenges that is turning them on!

When it comes to pensions, there is less enthusiasm. 66% of accountants won’t get involved in choosing a pension scheme

The Regulator is setting up a new simple pathway for these firms

Micro micros (those with 2 or less employees) represent 50% of staging population (680,000 are known to the Pension Regulator).  Most of these micro micros won’t think of themselves as an employer needing to stage auto-enrolment.

For them, there is to be a new program knows as  “Express Steps”;

as the name suggests, this will break auto-enrolment down into simple steps -with a default journey focussing on the most typical request of micro micros  –

“just tell me what to do”.

The Regulator is segmenting these employers into five groups, each of whom will get a customised journey

The five journeys

The  first is the standard group, what we know as Steve Bee’s chip shop!

The second is the Carers – who will get their own journey

The third is the Digitally exempt (1200 employers do their payroll returns off line)

The fourth is the 300,000 of so with no eligible jobholders (these will hacesimple simple steps)!

The fifth are employer  who don’t have any staff at all, and they will have virtually nothing to do at all

Further steps for micros

The Regulator is busy transforming its website for micro micros.

The Pathfinder group of June 15 employers has taught the Regulator some lessons

In its drive for scale, it is learning that in future auto-enrolment will be virtually a B2C propositions (though there was no mention of changing the Regulatory permissions to advise on workplace pensions on a B2C basis.

The Regulator is looking at the Tone of their  letters  which are currently very authoritative 

“very direct” is good but doesn’t play well  with all audiences. 

Charles expressed his astonishment at how a sample letter with a different tone solicited remarkably different results.

It’s good to see the Regulator listening so closely to the feedback on matters such as tone. As I said at the beginning of this article, we have moved a long way since 2001!

Auto-enrolment is now tPR’s #1 priority

lesley titcombe2

lesley titcombe

Lesley Titcombe, Charles’ boss also spoke at this meeting. Clearly Auto-enrolment is now the number one priority for tPR and she looks like adopting a no-nonsense approach to making it happen.

I am – and this may be a first in my 32 years on the job, happy to say we have a Regulator who is not only sympathetic, but showing us the way to do it.

Hats off to the Regulator.

neil esslemont

Neil Esslemont

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in auto-enrolment and tagged , , , , , , , , , . Bookmark the permalink.

2 Responses to The Regulator makes it easier for micro-employers to auto-enrol

  1. Caroline Instance says:

    I too am happy to congratulate the current regulator. But, NO Henry, at the time Stakeholder pensions started Opra did not require an employer to “set up a scheme” just provide access to one. I should know: I was the CEO and I was a micro employer (of a Nanny) who provided access to a scheme of my employee’s choice. She went with an M&S one – bit ironic as tomorrow I am going to the M&S AGM to ask a question about the Living Wage. People need fair pay before they can get decent pensions.

  2. henry tapper says:

    My memory fails me! I remember Allied Dunbar paying advisers to set up shell schemes in the expectation that compulsion would follow and they’d fill up with money when they did.

    This was a terrible waste of time and still puts some employers off ten years later. I hope I didn’t imply that this activity was encouraged by the Regulator (you), but clearly it wasn’t discouraged as the Regulator is now discouraging.

    That’s what I mean by learning from Stakeholder, which frankly was a dry-run for auto-enrolment.

    My involuntary yawn last night signified my ennui at anything to do with stakeholder pensions which feel like they stole three years of my life!

    I remember well, you and others at OPRA arguing for a more ambitious and constructive system. You were shouted down.

    Thankfully we are doing better this time

Leave a Reply