Phoenix closes door on auto-enrolment joiners

Closed book provider Phoenix Group has confirmed it will not be accepting new members into group pensions through auto-enrolment.


The UK’s biggest closed book consolidator, with 6m customers and over £68bn assets under management, says it will contact all employers ahead of their staging dates notifying them of its decision not to take auto-enrolment customers.

The provider, which holds the Royal Sun Alliance, Pearl, NPI, London Life and Britannic brands, says the average standard AMC across its pensions is in the region of 1 to 1.2 per cent, although it says some products that allow access to specialist external funds have higher fund management charges.

The largest active scheme with an employer making contributions has a membership count of 75. Phoenix says the earliest staging date for any of its group schemes will not be before July 2014 although the vast majority of its group schemes are for small firms of less than 5 members meaning staging dates will take place no earlier than June 2015.

Phoenix’s largest group scheme has approximately 5,000 members although it was used solely for employees to contract out of Serps in the 1990s.

Its largest group scheme that permitted contributions other than rebates has approximately 1400 members but that employer no longer makes contributions and has subsequently made pension arrangements for its workforce elsewhere with another provider.

A Phoenix spokesperson says: “As a closed book provider we do not intend to transact in auto enrolment business and will not be accepting new members to schemes in order for an employer to meet their auto enrolment obligations. We have confirmed this to all employers and advisers that have asked to date and we are now considering our communications strategy for schemes as they approach their staging dates. We expect most employers who have active group schemes with Phoenix to have staging dates in June 2015 and beyond and we want to ensure any communications that may be required are accurate and reflect regulations and obligations on the employer that are appropriate at the time. We would look to time any communications so they aligned to communications from the Pensions Regulator with the aim of helping employers understand their obligations.

Although many schemes are no longer active, they may contain extremely valuable benefits for deferred members – examples will include guaranteed annuity rates, guaranteed fund values at retirement or guaranteed growth of investments.”