Helping employers select quality pension schemes
Thursday 1 August 2013
The Pensions Regulator has today launched a suite of new guides to help employers with limited pensions experience to select a good quality scheme for automatic enrolment.
An employer’s guide to selecting a good quality pension scheme for automatic enrolment helps employers evaluate whether a scheme is well run, offers value for money and protects workers’ retirement savings, without being costly or complicated.
The regulator’s research suggests that small and medium-sized employers will approach finance professionals with whom they have an existing relationship for advice about automatic enrolment. For this audience, the regulator has published two guides aimed at independent financial advisers and accountants which clarify how they can help their clients prepare for the new employer duties.
Executive director for DC, governance and administration, Andrew Warwick-Thompson, said:
“Choosing and running a good quality pension scheme is key to the success of automatic enrolment. Many employers already run a good scheme, but most organisations will be embarking on this journey for the first time. These guides will help employers and those advising them to feel confident about selecting a scheme that is well-suited to their workforce and business requirements.”
Some employers who select a group personal pension (GPP) or master trust for their workforce may choose to be more closely involved in the running of the scheme. To help them the regulator has published a guide to management committees for employers, monitoring your pension scheme (PDF, 57kb, 13 pages).
There is no legal requirement for employers to have a scheme management committee in place, but if an employer chooses to establish one it can bring certain benefits to a workplace pension scheme, including:
- early identification of administration problems
- better value for money
- improved employee engagement and awareness of employer contributions
- improved member understanding of their retirement savings
- fewer member complaints.
Mr Warwick-Thompson added:
“Not every employer will want to be closely involved in the running of their own pension scheme and instead will choose a good quality multi-employer master trust or group personal pension plan. However those engaged employers who do want to take a more active role can help to ensure the scheme is better run and lead to a more comfortable retirement for their workers. Monitoring your pension scheme, can guide them on how to do this.”
The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; and to maximise employer compliance with automatic enrolment duties.
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