Opting for full systems automation, not having too many investment managers and looking carefully at legal costs are the top three strategies for controlling pensions costs, according to Penny Green, chief executive of Saul Trustee Company and managing director of STC Pensions Management.
Speaking in the same panel debate on effective strategies for controlling pension costs, Alan Pickering, chairman of BESTrustees, added that employers should also try to ensure that their pension scheme and benefits package suit their organisation, and that they should communicate with members in a way that is most appropriate to them.
Trustees should also take control of the decisions they make in order to ensure the most effective use of their spend.
“One of the big weaknesses in the UK pensions industry is the number of people that act as gatekeepers to the trustee board,” said Green. “If that can be broken down, we will get trustees starting to take good decisions.”
This can then help to control costs, she added. “Where the trustee does not have control and drive it in the right way, they run the risk of not making the best use of their money."
Regularly reviewing advisers can also help to control pension costs, said Pickering. “It is important to have a timetable for reviewing advisers, [for example], every three or five years,” he explained. “It is a good discipline to have that review process there.”
This does not mean an organisation has to go out to competitive tender every time, which can be an expensive task. In some instances, a review of the market will suffice. He said: “It is a waste of time and money to go out for competitive tender unless there is a real reason to."
But he added that if there is a real problem, an organisation should not wait until the next scheduled review to out to tender.
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