What auto-enrolment means for the pensions industry

• the auto-enrolment scheme has been designed to run in parallel with the existing pensions industry
• people who are already enrolled in an occupational pension scheme or equivalent personal pension scheme will not be automatically enrolled into the new system
• commercial providers will have the opportunity to be involved in the auto-enrolment system through separate tenders for investment management, administration and fund accounting services
• the providers chosen to provide investment management services will be called ‘Registered Providers’
• the Registered Providers will not have any direct contact or relationship with the employees – the National Automatic Enrolment Retirement Savings Authority (NAERSA) will be their single customer

Further information on the tender process and the types of funds that Registered Providers will be required to provide will be available soon.

• it will eventually become an independent, statutory body
• it will tender for investment management, administration and fund accounting services
• it will collect contributions from the employee, employer and the State
• it will distribute contributions to the Registered Providers for investment
• it will allocate investment returns to employee accounts
• it will operate the online portal where employees can see their account balance and make decisions such as opting out
• it will be responsible for compliance with the scheme
• it will ensure that the participants interests are at the heart of the system
• it will facilitate the ‘pot-follows-member’ approach whereby employees will have only one account with the National Automatic Enrolment Retirement Savings Authority over their working life
• economies of scale over time will allow the National Automatic Enrolment Retirement Savings Authority to keep fees and costs down