Analysis – Page 12
-
Analysis
Pension schemes' impact on a business
IF YOU READ NOTHING ELSE, READ THIS…Most employers with DB schemes expect a negative impact on the business’s financial performanceM&A activity and the ability to raise finance are being stifled by DB deficits.Auto-enrolment is expected to add to employers’ cost burden.An employer’s pension scheme, particularly if it offers defined benefits ...
-
AnalysisAuto-enrolment needs strong communications strategy
IFYOU READ NOTHING ELSE, READ THIS…Creative auto-enrolment communication strategies can educate first-time pension scheme members.A good communication strategy will relate to employees’ personal retirement goals.Key messages should be presented in a way that helps employees understand the consequences of their actionsPension scheme communications strategies have traditionally focused on the tax-efficient ...
-
Analysis
DC pension schemes can learn governance lessons from DB
IF YOU READ NOTHNG ELSE, READ THIS…A committee should be at the heart of a robust pensions governance structure.Governance committees should consider appropriate investment fund options and default strategies.Scheme members should be given clear and relevant communications.The defined contribution (DC) pension plan has become the scheme of choice for many ...
-
Analysis
DC pension default investments explained
IF YOU READ NOTHING ELSE, READ THIS…There is no single definition of a default fund.Investment strategy is as, if not more, important than asset allocation.Nest is expected to become a benchmark pension scheme, particularly on charges.A default investment option is the fund or funds into which employers automatically put employees ...
-
Analysis
Choosing a provider for auto-enrolment
IF YOU READ NOTHING ELSE, READ THIS …Employers need to identify their pension scheme requirements before researching the market.A beauty parade should typically involve two or three pension providers.Switching pension provider typically takes between 12 and 18 months.If an employer is dissatisfied with its pension provider, there is an extensive ...
-
AnalysisStep-by-step guide to auto-enrolment compliance
IF YOU READ NOTHING ELSE, READ THIS…Employers should identify their staging date as soon as possible.A project team should be appointed to manage systems and processes.Any systems developed or redesigned for auto-enrolment purposes should be future-proofed.Auto-enrolment communications must be clear and easy to understand.1. STAGING DATEEmployers must first ascertain their ...
-
AnalysisLegal issues around auto-enrolment
IF YOU READ NOTHING ELSE, READ THIS…Employers cannot agree to provide alternative benefits on the understanding an employee opts out of a pension scheme.Qualifying earnings include various components of pay, including salary, wages, commission and bonuses.Employers must ensure they identify workers correctly under auto-enrolment.Ian Curry, associate, Wragge & CoQ: I ...
-
AnalysisKnow the facts on auto-enrolment
There are key facts that all employers planning for auto-enrolment should know. Gillian McNamara, policy lead, employer compliance regime at The Pensions Regulator (TPR), says: “There is one crucial figure to know even before developing a plan to comply with the new duties, and that is the number of people ...
-
Analysis
Pros and cons of absolute return funds
IF YOU READ NOTHING ELSE, READ THIS…Absolute return funds (AFRs) have grown in popularity on the back of volatile equity market performance.ARFs are relatively expensive and, despite their name, can still lose money.Employers tend to use ARFs in conjunction with a more passive fund for their default investment option.Absolute return ...
-
Analysis
Ferdinand Lovett: Typical legal queries from HR
Ferdinand Lovett, solicitor at Sacker and Partners, and legal expert at Employee Benefits Live 2012, tells Debi O’Donovan, editor of Employee Benefits, the common questions he and his law firm are being asked by HR and benefits managers with regards to pensions auto-enrolment.Lovett flags up the common legal areas that ...
-
Analysis
Flex communication must include auto-enrolment
Employers that will reach their auto-enrolment staging date next year are facing one of the last opportunities to adapt their flexible benefits schemes for pensions auto-enrolment and communicate changes to employees to avoid extra costs, said Mark Baker, senior associate at law firm Pinsent Masons.The most common time of year ...
-
AnalysisBe sure of data requirements for auto-enrolment
IF YOU READ NOTHING ELSE, READ THIS…Employers with early or imminent staging dates say they underestimated the complexities of auto-enrolment.A first step is to define qualifying earnings, and it is up to the employer to take a view on each component of pay.Opt-out forms must be issued by the pension ...
-
Analysis
Call for clarity on pension scheme charges
IF YOU READ NOTHING ELSE, READ THIS…The average annual management charge (AMC) on pensions is less than 1%, according to the Department for Work and Pensions.The Association of British Insurers is calling for greater transparency around pension scheme charges.The National Association of Pension Funds plans to publish an industry code ...
-
Analysis
The difference between active and passive investments
IF YOU READ NOTHING ELSE, READ THIS…Passive and active management are simple concepts to understand. Don’t be afraid of the language.Most defined contribution (DC) default funds will be passive arrangements to offer low-cost access to investment markets.Active management can provide higher returns but is not typically used in defaults because ...
-
Analysis
Expert tips on surviving pensions auto-enrolment
If you read nothing else, read this…The first organisations to reach their staging date for auto-enrolment have had to make both expected and unexpected changes to their systems.Planning for auto-enrolment should begin well in advance to allow time to tackle any issues that may arise.Communicating with staff about changes is ...
-
AnalysisAre payroll providers up to the pensions auto-enrolment task?
If you read nothing else, read this…Employers have high expectations of their payroll providers ahead of auto-enrolment.Employers must have a clear understanding of the auto-enrolment requirements they have for their payroll provider.Payroll providers face the challenge of preparing for both auto-enrolment and real-time information (RTI).Auto-enrolment has arrived and, as implementation ...
-
Analysis
What level of investment risk should employers and employees take?
If you read nothing else, read this… Employers and pension trustees have been seeking ways to limit the level of risk in default funds. Poorly performing investments will reduce the size of pension pots, with repercussions for employers and staff Ascertaining risk for scheme members is fraught with difficulties. The ...
-
Analysis
How to clearly communicate pension scheme contributions
If you read nothing else, read this… Pension scheme communications should refer to contributions as pounds and pence rather than as a percentage of salary. Employers should clearly illustrate all tax relief relating to employees’ pension scheme contributions. Pension modelling tools can help engage employees by enabling them to assess ...
-
Analysis
How to communicate defined contribution pension schemes
If you read nothing else, read this… Keep communications to employees about the importance of workplace saving simple and direct. Do not fall into the trap of stereotyping employees when targeting differentgroups in pension communications. Encourage employees to save more for their retirement by using pension modelling tools and providing ...
-
Analysis
Right ingredients for a DC investment strategy
If you read nothing else, read this… 80% of DC pension members opt for their scheme’s default fund. There is some disagreement over whose role it is to set asset allocation. The Pensions Regulator expects improved investment governance. DC schemes are moving to spread investment risk outside pure equities.Case study: ...