The provider says it has already had some cases where employers who are existing clients have made their first contact in relation to auto-enrolment after their staging date has already taken place, meaning they are in breach of their legal requirements.
It reports that cases of employers leaving auto-enrolment to the last minute are becoming increasingly common, and predicts more will be in technical default as the numbers reaching their staging dates swell in the coming bulge months of April, May and July. Aviva reports that existing clients are leaving auto-enrolment to the last minute even though they have received written notification of what they have to do from both their provider and the Pensions Regulator.
In some circumstances employers are being told their provider will not be prepared to accept their new auto-enrolment population as the provider cannot offer profitable terms within the predicted price cap, meaning they will have to go to master trust providers.
Aviva head of policy, corporate benefits John Lawson says: “We are reaching out to our existing customers, but many of them are putting off dealing with auto-enrolment until the last minute, and ultimately it is entirely up to them to deal with this. We have even had some cases of people only getting in touch with us after their staging date has passed.
“The numbers that miss their deadline are only going to increase as the numbers of smaller employers staging swells exponentially. I hope the Pensions Regulator takes a pragmatic approach to this and lets those that are at least trying, to get on with it, and only target those employers who are deliberately dragging their feet.
“If we can take them, we will. But where we can’t, because of the profile of the workforce, they will have to go to one of the master trusts like Now or Peoples or Nest.”
Chase de Vere auto enrolment specialist Sean McSweeney says: “We got a call from a firm of accountants with 340 staff, just two weeks before their staging date. It is a real worry that so many employers are leaving it so late to deal with their auto-enrolment obligations.
“A lot of people think their existing scheme would take them, which has proved not to be the case, or that they would be able to use Nest, when they have lots of highly paid employees who would be hit by the contribution cap.