Nest and other providers say the expected flow of April stagers has failed to materialise, raising concerns of widespread flouting of the law by employers.
Nest chief executive Tim Jones says his organisation has not received the numbers through the door that had been predicted, and says other significant providers tell him they have had similar experiences.
Both Aviva and Standard Life tell Corporate Adviser they too believe significant numbers of employers are missing their staging date.
Providers believe large numbers are postponing by three months, which they are legally permitted to do. What is not clear is the extent to which those that have postponed have fulfilled their obligation to write to employees notifying them of this, or have a qualifying scheme set up ready should they want to opt in.
The news has raised calls for tougher action from The Pensions Regulator, which is yet to issue a single fine, despite widespread minor breaches of the regulations.
Jones says: “So far it has been relatively quiet. And this is not just a Nest phenomenon. I have spoken to a few other significant providers and they agree that the April quarter has been has been quieter than they had expected it to be.
“We are not seeing the significant step-up that we would have expected had all those due to stage in April gone through. We are doing hundreds of employers a week but not thousands. Some people look to have gone through their staging date without having put a scheme in place.”
Aviva head of policy, corporate benefits John Lawson says: “I think we are already seeing employers miss their staging dates in significant numbers. We calculate each month the total number staging and the number of our clients who should be. Our projections show gaps are appearing between the numbers who have staged and those that we think should have, and those gaps are getting bigger every month.
“We are in contact with these employers but they are not telling us they are doing their pension with someone else. I think an increasing number are, like the rabbit in the headlights, simply not doing it.
“The big problem for the Regulator is that if you allow employers at this stage to get away with not complying on time you create a culture of disobedience. When you look back at stakeholder, when more than 70,000 employers ended up not bothering to set up a scheme, you have to consider the potential for widespread civil disobedience.
“It is incumbent on the regulator to show some teeth and start taking some action.”
Chase de Vere proposition manager, AE Sean McSweeney says: “We have been calling for strong action from day one. For us a fine would have been very useful in getting people motivated. We have already had people saying to us ‘I didn’t do stakeholder and nobody bothered me over that, so I am not going to bother with auto-enrolment either.’”
Standard Life head of corporate strategy and propositions Jamie Jenkins says: “We are concerned that of the 5,000 or so who should have staged in April, not all have set up a pension scheme. They can defer, of course, but there is a concern that they have not done that first part, which is communicating with employees by April 1. There is a worrying gap.”