Good governance and employee engagement are vital to the success of defined contribution (DC) pension schemes, says The Pensions Regulator.
Employers need to be mindful of the role they play in pension provisions to help increase member understanding, said Darran Burton, practice manager, The Pensions Regulator.
Addressing delegates at the Employee Benefits Pension Summit 2010 in Pennyhill Park, Surrey, Burton explained that to protect the benefits of members of work-based pension schemes employers need to be fully aware of their duties and responsibilities. By taking a more active role they can cultivate a committed and engaged workforce by helping staff make informed choices about their pensions.
He advised that to ensure good governance of DC schemes employers need to act as a conduit of information on how staff can join schemes, the costs involved, the benefits and provide access to a financial adviser if necessary.
As DC pensions become increasingly important, reassessing and reviewing the risks associated with the schemes are vital, he said.
The Pensions Regulator plans to provide more support for employers in light of the forthcoming auto-enrolment into workplace pension schemes from 2012.† “With pension reforms coming it is necessary to achieve an appropriate regime that is mindful of the burdens on businesses,” said Burton.
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