Pensions news
Pension news
NOW: Pensions developments IN JULY, NOW: Pensions announced that it was withdrawing from the master trust assurance list of providers for automatic enrolment (AE) as it works to resolve historic issues processing contributions for a small percentage of clients. NOW: Pensions accepts that getting these schemes up to date has taken longer than it should due to the complexity of some of the cases, the poor-quality data that was sometimes involved and the systems used. To prevent a re-occurrence of these issues, NOW: Pensions has invested and continues to invest heavily in new systems, people and processes. Over the past two years, it has been building a large internal operation out of its office in Nottingham and its own AE site to upload payroll files. This new system was launched for new clients at the end of last year, and existing clients will be gradually moved across to it. Morten Nilsson, former chief executive officer (CEO) of NOW: Pensions, said: “We are confident that this work will be completed shortly. Providing our clients and members the best possible service remains our top priority. We should have been more proactive in our communications with affected clients and members regarding these issues and apologise wholeheartedly to those we have let down. In this instance, we have fallen short of the standard of service we aim to provide.” Troy Clutterbuck, who joined NOW: Pensions in 2016, has been appointed interim CEO. Nigel Waterson, chairman of the board of trustees, commented: “Morten Nilsson has made a huge contribution not only to the success of NOW: Pensions, but to the whole automatic enrolment project in the UK. He leaves an indelible legacy in the UK pensions sector.” Master trust approval THE PENSIONS Regulator (TPR) has recently approved the Corporate Pensions Trust (CPT) provided by national financial advisory group the Lighthouse Group. This makes the Lighthouse Pensions Trust, the principal part of the CPT, the only fully-advised master trust workplace pensions solution approved by TPR. Malcolm Streatfield, Lighthouse chief executive, said: “Our auto-enrolment specialists cover the whole of the UK. They will come and meet employers at their premises or speak by phone and explain the process. Thereafter, Lighthouse will do the rest. Our set-up services cover the whole auto-enrolment process including on-going requirements.”
Workplace savings key A STUDY carried out by Aegon in fifteen countries to provide insight on what retirement means to people across the globe, reveals amongst other things that the UK is world leading in ensuring that workplace savings are key to providing retirement income. People in the UK now expect 32% of retirement income to come from their workplace saving, with a further 42% from the government and the remaining 26% from their own savings and investments. Only the Netherlands placed greater reliance on workplace savings with workers there expecting 38% of their total pension income to come from employer schemes. Globally, people expect workplace plans to fund 24% of their retirement income. In the following countries, people expect half or more of their retirement income to be funded by government benefits: Spain (65%), Germany (55%), Hungary (55%), Poland (54%), Turkey (53%) and Japan (50%). Despite recent announcements regarding future increases in UK state pension age, young people in the UK still expect to retire at a median age of 65 which places greater reliance on adequate private provision. Steven Cameron, Aegon UK’s pensions director, said: “While UK employees benefit from the workplace pension focus, the ever-increasing numbers of self- employed don’t. This highlights the need to focus on how to improve pension provision for this significant element of the working population.” Chart showing the expected proportion of retirement income by source
Your own savings & investments, including IRAs
30%
43% 35% 35% 34% 32% 30% 29% 28% 28% 26% 26% 26% 26% 24% 20%
11%
20%
Your employer / previous employers (through workplace retirement plans.) The government (through social security & other government benefits)
17% 21%
38%
15%
23%
27% 32%
17%
24%
29%
26% 25% 26%
30%
65%
55% 53%
54%
50% 55%
49%
42%
46% 42%
46%
42%
39% 40% 41%
27%
More AE and higher contributions needed FIGURES PUBLISHED in early August by the Office for National Statistics, which show income inequality between pensioners at record levels, prompted Trade Union Congress general secretary Frances O’Grady to say: “The record gap between rich and poor pensioners cannot be allowed to continue. To close the gap we need to enrol more workers into pension schemes, and increase pension contributions. The review of automatic enrolment is an opportunity for the government to extend pensions to more low-paid workers. And companies must make sure that fair contributions to staff pensions are given priority over excessive shareholder pay-outs and boardroom bonuses.” Changes to pensionsync support WITH THE numbers of employers, bureaus, accountants, book-keepers and advisers using pensionsync increasingly rapidly, the company is changing management of its basic and premium support. Premium support is being improved with priority given to its users, but the most significant change is withdrawal of live webchat from basic support. (http://bit.ly/2wlr2rq)
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Issue 34 | October 2017
| Professional in Payroll, Pensions and Reward |
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