Pensions insight
mortgage and a young family to look after, paying all the household bills has been the priority for Bashful rather than pensions. But the children have all started school now and his wife returned to full-time work six months ago. This extra income and the fact the family is no longer paying nursery fees has meant Bashful has money left in the joint account at the end of each month and so he is keen to start planning for his future. Bashful presumes that he was automatically enrolled into his employer’s pension last year. He is, however, in fact paying into the company pension at the automatic enrolment minimum level of one per cent; his employer offers a scheme where they match contributions up to six per cent of basic salary. Now that his financial situation has improved, Bashful could be making use of this. Unfortunately, despite his company having provided ample information and opportunity for their employees to read up on and understand the company pension offering, Bashful has never read any of the information on the intranet or in the letters sent. He couldn’t see the point since he
couldn’t afford it anyway. Furthermore, he’s always found pensions a bit baffling and is slightly embarrassed about his lack of knowledge. ...employers and trustees need to give member- variance real consideration when they’re establishing their scheme’s strategy ... A pension presentation would help enormously and give Bashful the opportunity to find out more about the company pension. Bashful would also welcome the opportunity of sitting down with someone from outside the company who can provide an independent and unbiased perspective, to help him understand what his options are and how
much contributions might cost him. Bashful’s employer has a good, compliant pension arrangement, but if engagement levels aren’t improved, the member outcome for employees such as Bashful will in many cases be one of disappointment. Face-to-face communication with employees, in the form of pension presentations and 1:1 clinics, would improve their employees’ levels of engagement and understanding. n The final word The seven friends’ scenarios illustrate that there’s no fairy tale ending in retirement and it’s quite a challenge to deliver a so called ‘good member outcome’ to each of them, without thinking about the needs of individuals or at least cohorts within a scheme. With no magic wand to wave, employers and trustees need to give member-variance real consideration when they’re establishing their scheme’s strategy and regularly reviewing the scheme, so their members can have a good chance of living happily ever after.
Professional development update courses
One day each
A set of three continuing professional development (CPD) modules, each covering four topics to increase your knowledge and help you increase your CPD points.
These three courses cover: ● Module one: Benefits changes and other topics ● Module two: Statutory payments and other topics ● Module three: Further challenging topics
Book online at cipp.org.uk or email info@cipp.org.uk for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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Issue 35 | November 2017
| Professional in Payroll, Pensions and Reward |
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