Payroll providers slow to react to pension reforms

Speaking during a fringe event on preparing defined contribution sponsors for auto-enrolment, Simon Belton, head of pensions policy at the Spirit Pub Company, said he had “concerns over a number of payroll providers”.

“Some of them have been very slow to react to the reforms; perhaps they didn’t think we’d get to this point [so quickly],” he said. “[Our scheme] is fine now, but I know of others who are still [having problems].”

John Lawson, head of pensions policy at Standard Life, agreed payroll providers were poorly prepared, and claimed pension providers were prepared to fill the gap. “Most providers will act on the basis that payroll providers won’t do anything,” he added.

During the debate Belton also confirmed the Spirit Pub Company will use the National Employment Savings Trust for the majority of its workforce, and talking privately to PW he revealed the firm would most likely use the minimum contribution structure “due to the nature of [its] workforce”.

The issue of how auto-enrolment would be regulated was also raised by the floor. Lawson warned employers the Pensions Regulator would take enforcing the reforms seriously, despite its limited workforce.

“The regulator will take this more seriously than it took [regulating] stakeholder schemes; they’re already employing 400 more staff,” he said.

“Of course, once you move down to the smaller companies, it will be more difficult to regulate, but whistleblowing will [be widely used].”

The news follows PW’s revelations that insurers are finding themselves caught short in the run-up to auto-enrolment and scaling back their promises to companies in terms of providing administration for low-paid, transient staff.