Unbundled is not second best – Paul Sturgess from Capita Hartshead
“I was somewhat dismayed to read the article One third of companies will use ‘expensive and ill-suited’ schemes for AE (Auto Enrolment).
The article made a statement that trust-based schemes are expensive and ill-suited for auto-enrolment, which I do not believe to be true.
In our experience, it is perfectly possible for unbundled schemes that use a best-of-breed approach and combine the services of several providers to stand up to comparison with bundled arrangements…..
As ever there is room in the market for both trust and contract-based vehicles and both must gear up to the challenges of auto-enrolment.
The survey says 30% wish to stick with trust-based solutions this shows they must be doing something to satisfy the needs of employers.”
Vested Interests – PensionsManager comment
We all know (or should do by now) that there is a big incentive to recommend contract based schemes - it's called commission. Some are in a hurry to maximise sticky residuals (trail commission) on pensions business prior to when the FSA, via the Retail Distribution Review, outlaws it.
Then there are 'Active Member Discounts' or 'let's rip off the early leavers'. Apathy and ignorance on the part of contract members coupled with no Trustee looking out for the members' interests, means potentially 'lambs to the slaughter' and a reduced pension pot at retirement for contract scheme members.
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