Nest will transform provider competition, claims UK market entrant

Australian pension technology firm SuperChoice claims employers will use payroll capability as a ‘weapon’  to drive provider competition and increase pension portability in the wake of auto-enrolment reforms.

As revealed by New Model Adviser® in July SuperChoice, a clearing house using ‘cloud-based’ technology to help administer multiple pension schemes, has partnered with Logica to offer its service to UK pension providers.

SuperChoice chief executive Peter Philip said auto-enrolment reforms would change the way providers compete for corporate business.

‘Employers are going to have a significant burden put upon them dealing with auto enrolment and will look to pension providers to solve that,’ said Philip.

‘What we saw in Australia, where auto enrolment is mandatory, is that having this capability changes the competitive landscape .’

According to Philip the National Employment Savings Trust (Nest) which is a brand new scheme targeting a lower earning mass-market, would also transform the status quo as consumers demand greater flexibility.

He said providers would be forced to let employers use Nest alongside their own schemes. Nest members will also be able to stay in the same scheme even though they move employers. Philip said employees would start demanding the same portability from established providers.

He said: ‘With us employers can do several things in one remittance they can send info to one provider as well as Nest. However, handling multiple schemes would be difficult for a provider to do because they would be handling information of competitors…what we do is take a single payment and split it out to different providers.

‘There is a global trend towards choice that will eventually see employers using multiple providers. The fact you are able to move Nest around from employer to employer consumers will think that is a great thing.  The great issue that Nest will settle is portability.’

Philips said SuperChoice was in talks with a number of large providers and is close to finalising deals in the next few months.