Now: Pensions, the third-biggest master trust in the UK, has been put up for sale following a catalogue of administration problems that has led to the provider exiting the regulator’s approved provider list and a fine for its trustees.
Sources close to Corporate Adviser say the provider, which has been beset with administration problems since launch and whose default has suffered several years of poor performance, has been offered for sale to a number of parties over the last few months. However, at least one provider has rejected the £560m scheme because of ongoing concerns over its administration.
Now: Pensions ran into problems at the outset of the auto-enrolment process back in 2012 when its outsourced auto-enrolment middleware solution failed to pick up instances when incorrect data was sent by employers, meaning employees’ contributions have not collected and have not been invested in the market where data was incorrect. The scale of the technical problems has only fully emerged over the last year despite them persisting since back in 2012.
Earlier this month the Pensions Regulator fined the trustees of Now: Pensions £20,000 for administration problems, following an earlier fine of £50,000 last November. TPR issued the provider with an Improvement Notice, while a Third Party Notice, has been issued to the trust manager, Now: Pensions Ltd (NPL).
The trustee and NPL have also agreed to set up a scheme of compensation for members who have been affected.
In February 2017, with the consent of the trustee, TPR required the trustee to commission an independent skilled person’s report into the scheme’s ongoing issues. Following the issue of the report in June 2017, TPR continued to engage with NPL and the trustee to ensure steps were taken to address the shortcomings identified.
Now: Pensions voluntarily withdraw from the master trust assurance list in July 2017 and appointed an independent trustee, Dalriada, to the trustee board in October 2017.
The provider, which is the UK arm of Danish provider ATP, has signed up 30,000 employers to date and has assets under management of £560m.
The provider has also been under pressure over the dismal performance of its default fund, which has barely kept pace with inflation through three years of rising markets. The diversified growth fund, managed by Now: Pensions Investment A/S Fondsmæglerselskab A/S, a wholly owned subsidiary of ATP in Denmark, achieving annualised returns of just 2.8 per cent in the three years to June 30, 2017, significantly less than the double-digit returns achieved by almost all its competitors over the period.
ATP launched Now: Pensions in early 2012, headed by CEO Morten Nilsson, and with a high-profile trustee board that included Imelda Walsh, former Group HR Director of Sainsbury’s, John Monks, member of House of Lords and former General Secretary of ETUC and TUC, Christopher Daykin, former Government Actuary and Nigel Waterson, former Shadow Pensions Minister. Nilsson exited the company last August.
Now: Pensions said it would not comment on market speculation.