SME Plan Sponsors Spurn NEST
18 July 2012 (PLANSPONSOREurope.com) - Just 5% of SME plan sponsors intend to use NEST as their sole selected scheme for Auto-Enrolment (AE), according to research from Jelf Employee Benefits at a recent employer seminar.
More than three quarters (76%) of the senior HR and finance delegates surveyed felt that their company was likely to use a quality pension scheme aligned with their company branding.
Of the companies intending to use an alternative to NEST, 73% are likely to use one branded scheme for all employees, and the remainder (27%) will use an alternative scheme for selected groups only.
Steve Herbert, head of benefits strategy for Jelf Employee Benefits said: “One of the pivotal drivers for employers offering a pension scheme has always been differentiation which supports both recruitment and retention. Yet the kudos of offering a pension scheme has just been removed by the introduction of AE, and it follows that an employee is unlikely to be grateful for a company offering one once he or she understands that a pension scheme is now a minimum legal right.
“Therefore the employers that emerge as real winners, in achieving a return on investment post-pension reform, will be those who not only deliver and demonstrate a quality pension scheme, but also embed their company name, livery and values into that offering. The ability to achieve this within NEST is severely hampered by the scheme parameters which are set by legislation and its intended role of a scheme of last resort for any employer who can’t otherwise source a scheme.
“Only time will tell if employers put their money where their mouth is, but it is certainly encouraging that SMEs are considering their options with a view to increasing employee engagement and mitigating some of the costs associated with AE.”