Farm business owners required to enrol workers in a pension are being urged to think carefully about the type of scheme they use amid claims vast sums of money could be at risk.
Following a change in the law, an estimated 1.8 million employers will be required to enrol staff in a suitable workplace pension in the coming months. Many farm businesses will fall in this category.
Pensions service firm Husky Finance has advised farmers to think carefully about the type of pension they provide for staff and consider taking advice from experts.
Nick Keppel-Palmer, chief strategy officer at Husky Finance, said there were two different types of pensions available to those affected by auto-enrolment.
He claimed one of these pensions was often operated by insurance providers and faced stringent regulations from the Financial Conduct Authority.
"There are also pensions called master trusts," Mr Keppel-Palmer added. "These were initially for single employers. They are regulated by the Pensions Regulator and there is really no barrier to setting one up."
Mr Keppel-Palmer said caps on the amount of money pensions firms could charge clients meant there were feelings in the insurance sector such funds needed to grow substantially to survive.
He suggested the competitiveness this brought, combined with the lack of protection over pensions money in these types of schemes, meant significant funds were at risk.
"The problem is the regulation is not strong enough to protect the individuals," he said, claiming it could also take up to 18 months to update legislation to improve such protection.
He said farmers needed to consider the trade-off between firms under higher regulation, which may cost more, and smaller firms which could leave savings in greater uncertainty.
"Take some time choosing and be sure why you have chosen what you do choose."
He also suggested farm businesses may wish to look into taking advice before choosing a pension provider.
"The other [issue] is whether you get somebody to help with auto-enrolment. If you sort out auto-enrolment yourself that consumes time and energy," Mr Keppel-Palmer said.