Auto-enrolment will fail unless DC members receive more practical help warns Kevin LeGrand, Society of Pension Consultants
Auto-enrolment has to work. The figures showing the number of pensioners in prospect over the next few decades display a yawning chasm between their increasing life expectancies on one side of the balance sheet and the levels of monies put aside to supplement the meagre state pension on the other....
The Pensions Regulator’s approach to DC outcomes in workplace pensions
The Pensions Regulator has set out its approach to maximising employer compliance with the auto-enrolment duties and supporting the pensions industry to deliver defined contribution (DC) schemes with the characteristics necessary for good member outcomes. The Regulator began a review of its...
Guy Winter, Towers Watson, on auto-enrolment and DC governance
One of the clearest messages coming out of Towers Watson’s 2012 DC Governance survey is that most sponsoring employers are looking to use their existing defined contribution (DC) arrangement for auto-enrolling eligible employees not in a pension scheme. Only a minority are looking to set up a...
The new ABI code of conduct encourages customers to research the open market for the best annuity says Richard Parkin, Fidelity
Financial decision making is full of examples of people selecting inappropriate choices. Perhaps most notable is the process of converting accumulated retirement savings into an income. For many, this is an irrevocable decision, yet one which gets relatively little attention, given the significant...
The decision on the appropriate default fund is important. Financial journalist, Allison Plager reports
The future is defined contribution (DC). Indeed, Towers Watson’s FTSE Survey 2012 showed that one third of FTSE 100 companies offer DC schemes only to their employees, more than double the number in 2010.
This trend is set to continue with auto-enrolment and the advent of the National...
Maladministration is in no one’s best interest – and it costs more – argues Lesley Carline, PASA
The Pensions Administration Standards Association (PASA) is the new kid on the block for ensuring that members receive the best service and pension provision from their scheme and the administrator. With the best will in the world, can we currently say with confidence that those who look after...
Employers can improve member outcomes on average by about 40–60%, crucially without the requirement for additional employer and employee contributions, according to JLT research Business benefit or blind faith?, if they adopt JLT’s ten recommended strategies.
If members qualify for an...
The number of FTSE 100 companies providing defined contribution (DC) pensions to staff has increased to an all time high according to a Towers Watson survey. One third of FTSE 100 companies now offer DC only schemes to all employees – more than doubling the sole use of DC schemes since 2010....
Duncan Howorth, Jardine Lloyd Thompson, assesses what preparation is needed over the next five years as the pension provision goalposts move
The pensions world will look very different in 2017 as a number of factors come into play in the pensions game at the same time.
What are these factors? First, we have auto-enrolment – a massive boost to retirement savings in the UK; second the Retail Distribution Review – and the...
Contract based plans are stepping up to the mark as regards DC governance says Guy Winter, Towers Watson
Contract based arrangements are popular with many employers, offering a cost effective vehicle for investing company and employee contributions with the provider taking main responsibility for the administration, communication and compliance of the plan.
There is no legal requirement for employers...
It is worth reviewing your pension plan during 2012 advises Tim Johnson, Gallagher Employee Benefits
Many money purchase pension arrangements in the UK still offer relatively poor value for money to their members. Whether through historical mischance, a lack of funding available from the employer, greedy product providers or advisers, it does not really matter. With substantial change coming into...
The government should lift two key restrictions on the operation of the National Employment Savings Trust (Nest) as a matter of urgency, says a parliamentary report from its Work and Pensions Select Committee.
The government established Nest as a low-cost pension scheme to help deliver the auto-...
History has come full circle as DC re-emerges and overtakes DB once again explains Emma Watkins, MetLife Assurance
Much like the dinosaurs, final salary or defined benefit (DB) pension schemes tend to be portrayed as things that belong to ancient history – a feature of a bygone era when people died younger and employers were more paternalistic.
There is now a clear trend towards defined contribution (DC)...
Peter Ford and Naomi Hancock, Norton Rose, explain the reasons for the abolition of defined contribution contracting out and protected rights
On 6 April 2012, defined contribution (DC) contracting out will cease and protected rights will be abolished. The government believes that because benefits from DC schemes cannot be accurately predicted and individuals have to make difficult judgments about whether they are better off being...
High pension charges and the wrong choice of annuity could cut a saver’s potential pension income by a quarter (24%).
A report for the National Association of Pension Funds (NAPF) by the Pensions Policy Institute (PPI) revealed that savers who did not get the best deal from these two factors...
Employers are realising that their employees require more than one style of scheme design explains Will Aitken, Towers Watson
A number of employers are looking again at the design of their defined contribution (DC) pension provision. Whether the catalyst is economic conditions, changes to defined benefit (DB) provision or the need to prepare for auto-enrolment, pension design is coming under scrutiny. Whenever pension...
High pension charges and the wrong choice of annuity could cut a saver’s potential pension income by a quarter (24%).
A report for the National Association of Pension Funds (NAPF) by the Pensions Policy Institute (PPI) revealed that savers who did not get the best deal from these two...
Allison Plager, financial journalist, looks at how consultants are getting on with investment issues for DC schemes as they gradually take over from DB
As the decline of the much loved defined benefit (DB) pension scheme continues apace, companies are offering money purchase schemes to replace them. The National Association of Pension Funds’ Annual Survey 2011 showed that 23% of final salary pension schemes are now shut to new members and...
Nest could prove to be a suitable reference point for other pension providers suggests Rudi Smith, Towers Watson
Recent legislation and regulator guidance has brought into focus the need to consider defined contribution (DC) scheme design and it is only natural for Nest to come under careful scrutiny. To what extent will Nest act as a benchmark for DC schemes?
Nest undertook a perhaps unprecedented degree of...
The DWP has sketched out the basic design for the default option to which schemes can add the detail explains Richard Parkin, Fidelity Worldwide Investment
We waited a long time for this year’s Department for Work and Pensions’ (DWP’s) guidelines for the design and governance of default investment options. These apply to defined contribution (DC) pension arrangements that are to be used for auto-enrolment from October next year....
