Pensionsync is launching a pension provider comparison website designed to help UK employers select a workplace pension from providers connected to payroll providers through its software.
The service ranks providers, which must either be accredited to The Pension Regulator’s master trust assurance framework or be FCA-regulated life offices, on the basis of their openness to all-comers, and on Defaqto rankings, with results partitioned on number of employees, regularity of payroll and payroll provider already being used.
Pensionsync says it has developed the tool, which is free to users and which does not generate revenue for the company, to raise awareness of its services. Pensionsync CEO Will Lovegrove says the comparison site is not intended to be a definitive process for selecting auto-enrolment provider, with rankings not impacted by strength of default fund or financial strength of the provider. But he says the service acknowledges the reality that many of the small and micro employers yet to stage need to understand which providers are easy to work with.
Pensionsync deliberately decided not to penalise providers for their ability to interface with payroll as this would have penalised Nest, which, despite efforts to integrate with payroll providers, does not interface with Sage yet because Sage has not made connections available.
Lovegrove believes the TPR master trust assurance framework and FCA controls on workplace pension providers mean employers should be able to rely on the tool without fear of breaching their governance responsibilities.
Lovegrove says:” What pensions.market reveals is that there is a very healthy workplace pension provider market competing for business from the one million small employers yet to stage. The providers in this market have different propositions, charges and services to offer. There was a time when many in the industry believed there would be a capacity crunch of pension provision to SMEs. In fact, the opposite is now true. There is good capacity and good choice in the market.
“However, employers have very few sources of trusted and free information to turn to when picking a workplace pension provider, and this information isn’t in one place or easily understood. In their haste to avoid being fined by the regulator, we believe many SME employers are not reviewing the market in any depth before making a choice.
“We have also chosen to compare payroll software products, giving superior scores to those payroll products that are investing, at their own cost, in building pension data automation connections to multiple pension providers. It is these payroll software companies that understand that their customers need better tools to lower the burden of automatic enrolment.
“We are not increasing or decreasing ratings based on connectivity. If we had, this would have left Nest being marked down. It has made great efforts to make itself ready to connect with payroll providers. But incredibly, Sage is not yet ready for Nest. Why should Nest be penalised just because Sage hasn’t connected with it?
“We also think our payroll software comparison tables will be interesting to the 200,000 employers currently using the free HMRC Basic Pay Tool who have been left high and dry because it has not been expanded to include automatic enrolment functionality such as workforce assessment.”
