The Work and Pensions Select Committee has backed Federation Small Businesses’ (FSB) calls to do more to support pension saving among the 4.2 million self-employed people not covered by auto-enrolment.
While the Committee praises the success of the roll out of auto-enrolment to date, it warns of the dangers posed by potentially unstable master trust schemes to savers and small businesses. FSB has previously expressed concerns over the emergence of these schemes on the market and the lack of clarity over the liabilities small business owners face if their chosen scheme were to underperform or collapse.
FSB National Chairman Mike Cherry said: “Over the next two years more than a million small and micro businesses will be setting up a workplace pension in order to comply with auto-enrolment. These smaller employers are not pension experts. They need to know that when they set up a pension scheme for their employees, the money is safe, well looked after and will deliver value for money in retirement.
“If there is any question mark over the quality or resilience of certain master trust schemes, it is important that the Pensions Regulator has all the necessary powers to investigate and take effective action.”