Workplace pensions provider NOW: Pensions has left a voluntary ‘assurance’ scheme operated by industry watchdogs after they raised concerns about the firm’s administration and governance.
But The Pensions Regulator stressed there was no suggestion savers’ money was at risk, or that employers using NOW’s services were not complying with duties to workers auto-enrolled into pension schemes.
NOW admitted it was trying to sort out delays processing contributions from savers – an issue recently highlighted by This is Money after a reader’s £4,000 retirement pot vanished for eight months, but was tracked down after our intervention.
Savings plan: Government drive to auto-enrol all workers into pensions has led to the rise of master trusts, which manage centralised funds for several employers at once
At the time, The Pensions Advisory Service, which gives free help to the public, told us it had received reports of problems at NOW: Pensions since the firm changed its outsourced administrator, but did not reveal how many were involved.
NOW requested its own removal from The Pensions Regulator’s master trust assurance list because a change of third party administrator had led to problems for ‘a small percentage of clients’.
The regulator responded to say it ‘welcomes and supports’ NOW’s move to leave the list, which still includes some 22 pension providers.
The list was created to help employers setting up auto enrolment schemes to find pension firms that have received an independent audit of their governance standards and controls.
The Government recently passed legislation to protect pension savers using workplace master trusts against losing their nest egg, although it is not due to be implemented yet.
The Government drive to auto-enrol all workers into pensions has led to the rise of an estimated 100 master trusts, which manage centralised funds for several employers at once.
But there were fears regulation was not strong enough, and that British workers were at risk of losing their retirement savings if any go bust.
NOW, one of the bigger auto enrolment pension specialists, said it had chosen to withdraw itself from The Pension Regulator’s master trust assurance list of providers as it worked to resolve ‘historic issues processing contributions’.
But it acknowledged that getting schemes up to date had taken longer than it should have ‘due to the complexity of some of the cases, the poor quality data that was sometimes involved and the systems used’.
Chief executive Morten Nilsson said: “NOW: Pensions has always been a huge supporter of the master trust assurance framework and was one of the first providers to adopt it. We’ve since completed the framework three times and remain committed to it.
‘We feel that while we work to resolve these historic issues and ensure that every scheme is up to date, it’s appropriate to withdraw from the list. We are confident that this work will be completed shortly. Providing our clients and members the best possible service remains our top priority.’
Nilsson added: ‘We should have been more proactive in our communications with affected clients and members regarding these issues and apologise wholeheartedly to those we have let down. In this instance, we have fallen short of the standard of service we aim to provide.’
Nicola Parish, TPR’s executive director of frontline regulation, said: ‘Those in the master trust marketplace should be in no doubt that we will act if we become concerned about the way schemes are being run, no matter the size of the scheme involved.
‘Schemes have a responsibility to meet specific criteria required to remain on the master trust assurance list. If a scheme fails to meet the criteria, we will consider removing it from the list.’
TPR added that it was monitoring NOW: Pensions progress in addressing ongoing concerns about its scheme, and once the firm had done this it could apply to be put back on the assurance list.
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