The Pension Regulator should not market workplace pensions.

now 2018

Thanks to Damian Stancomb and Barnett Waddingham


In his statement to announce his scheme’s withdrawal from tPR’s list of workplace pension providers Morton Nilsson claims

NOW: Pensions has always been a huge supporter of the master trust assurance framework and was one of the first providers to adopt it. We’ve since completed the framework three times and remain committed to it

If any of the accountants who recommended NOW, did so because the ICAEW was behind the “MAF”, then they may well be asking just what was the point. Similarly, employers choosing workplace pensions on tPR’s website have reason to raise eyebrows when the majority of schemes promoted are there because they have the MAF.

The MAF has failed on two counts, it has failed as a reliable kite mark for scheme quality in selection and it has failed to protect some employers and members of NOW; Pensions master trust.

The granting and maintenance of MAF is no cheap business. Managing it is a major commercial enterprise for the Institute of Chartered Accountants of England and Wales. These costs ultimately pass on to members and employers who are entitled to ask what in NOW’s case the money has been spent on.

If MAF is no more than a marketing award purchased to gain a prized spot on the Pensions Regulator’s Choose a Pension pages, then NOW have got value for money. But that was never the MAF’s stated intention. The internal controls that MAF requires are meaningful, the issue is whether they are being monitored.

The problems at NOW are not recent, they first emerged before NOW moved administration from one third party (Equniti) to another (JLT). The move was supposed to improve the employer’s experience in terms of the interface between the collection of monies from payroll and the investment of monies into NOW’s simple mono-fund structure.

Administrative problems became worse when resulting from tax and AE band changes, many low earners in NOW were unable to claim the Government Incentive on contributions. NOW has properly compensated those affected but no long-term administrative fix has arrived

Meanwhile, the transition that caused a Christmas black-out at the end of 2014, continues to impact the investment accounts of many members. These fundamental problems have persisted now for well over three years.

This has not stopped NOW:Pensions being acclaimed.

In April 2013, NOW: Pensions became the first master trust to attain the (then) NAPF’s new PQM Ready Standard

In January 2015, NOW: Pensions achieved independent assurance of scheme quality in accordance with the new master trust assurance framework AAF02/07

Even today, NOW has maintained both the PQM standard and MAF accreditation. Let’s be clear, taking itself off the Pensions Regulator’s list is not the same as handing back your MAF certificate.

Meanwhile it has slipped to a one-star rating with Defaqto and for employers choosing pensions using Unlike PQM and MAF, there is no cost to providers for DeFaqto and Pension PlayPen ratings.

Choosing a workplace pension is a duty that rests with employers – not their staff. Employers are taught to rely on the Pensions Regulator for guidance in this matter. The Pensions Regulator’s website now advertises 22 schemes with MAF of which 11 tell the Regulator they are open for new business with small employers.

This system of “promotion by compliance” is an odd way to encourage engagement. In practice, we know the things that employers value most – low cost and hassle free administration – are not aligned with what members’ value most- good growth and a big fat pension pot at retirement. A proper way of valuing a workplace pension is on the value it offers both to employers and members.

The proof of a pudding is in the eating and many employers that have supped at NOW’s table have not found the pudding to their taste. Now, over two years since being granted MAF, NOW seem to be taking a step back.

Or perhaps they are being asked to. Here is Nicola Parrish of tPR states in a press release on NOW

“Schemes have a responsibility to meet specific criteria required to remain on the master trust assurance list. If a scheme fails to meet the criteria, we will consider removing it from the list.”

That consideration has come pretty late in the auto-enrolment staging cycle, too late for many employers who now are paying the consequence of the Regulator’s list and the false comfort of the MAF.

This post first appeared in Professional Pensions 25/07/17

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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