Well, we made it. Today is 1 October 2012 and the culmination of years of effort on the parts of many. From the talk of ‘hard’ and ‘soft’ compulsion (a full 10 years before Fifty Shades of Grey) to the realisation that this was unstoppable; from the furore over NEST charges to the as-yet unproven admin capabilities of everyone’s favourite truck builder, Tata, it’s never been less than a fascinating journey.
On such a momentous day, one looks outward for something appropriate to quote to mark the occasion. And, as so often, one’s thoughts turn to that great pensions guru, the late, lamented Dr Hunter S Thompson, who never quite said this:
“So listen up Bubba, and listen good, for I am a Doctor of Journalism and I know whereof I speak…the auto-enrolment hog is out of the tunnel and stands, blinking, in the watery sunshine while all around it circle the mediocre hacks with knives out and fear and hatred in their bloodshot eyes waiting to take a slice out of the poor bastard…I expect bad craziness, Bubba, and I expect it soon…”
I think we can all get next to that, don’t you?
For what it’s worth, here are just a few quick thoughts based on watching this for however many years…
1. It will work – I have no idea how many previously unpensioned staff will heed the call, but some will, maybe lots, and that’s a result.
2. It will get simpler – right now, many employers are wishing that full compulsion was coming in as managing opt-outs is (technical term) a bugger. But as we get movement on PAYE period alignment and software gets more connected and smarter, these pains will ease. I was really impressed with some of the kit on display at the EB Live employee benefits expo last week.
3. It will be another kidney punch to the lifecos – as if they didn’t have enough to worry about, NEST and its low-cost competitors NOW and the People’s Pension are a massive persistency threat to back books. Take this one seriously – it’ll be a slow burn, but within 6-7 years (not long in pension terms) the big insurers will have a markedly different business mix. All those commission-based schemes not so much, as it turned out, of a great idea.
4. It will cause blight for advisers – in research the lang cat conducted recently in association with our friends at The Platforum for our new jointly produced and on-sale-now Corporate Platform Guide (which I commend to you wholeheartedly), employers overwhelmingly want to get AE sorted before considering other shiny stuff, especially corporate ISAs and new platforms.
So there you have it. It’s here and it’s not going away. Today is the first day of what HST might have called The New Pensions Seriousness. A warm(ish) welcome to AE, then, and good luck to those employees who left the opt-out box unticked and are starting their first pension journey.
The statements will still be rubbish, by the way.