Pension news
Increase in employers missing staging date THE THIRD Aviva automatic enrolment (AE) staging tracker has shown a further increase in the proportion of businesses setting up their workplace pension after their deadline has passed. In the first quarter of 2017, one in six (16%) set up their scheme with Aviva after their staging date which is up from one in seven (14%) during the previous quarter and sixteen times higher year-on-year. The data also highlights that the proportion of firms preparing for AE well in advance has continued to fall. Only a quarter of firms applied to Aviva more than two months in advance of their staging date. This figure, the lowest on record, is down considerably on the high of 40% for quarter two in 2016. However, the proportion of companies applying a month or two months before their deadline has remained stable. Andy Beswick, managing director Business Solutions at Aviva, said: “What the figures do highlight is that there is still work to be done to make business owners aware of their obligations. As an industry, we’ve been talking about [AE] since the early 2000s and implementing it for over four years now. But to thousands of employers and employees, it is still a brand new concept and we need to make sure people aren’t getting left behind.” The table below details the proportion of workplace pension applicants to Aviva during 2016 and quarter one 2017 in comparison to their staging month.
LGPS employer guide outlining best practice THE PENSIONS and Lifetime Savings Association (PLSA) has launched the second in a series of guides aimed at helping new and participating employers in the local government pension scheme (LGPS). A guide for employers participating in the LGPS: Best practice (http://bit.ly/2neGaBr) aims to give an overview of the financial commitments, administrative responsibilities and regulatory requirements that employers face once they have joined. Joe Dabrowski, head of governance and investment for the PLSA, commented: “The new guide aims to explain what is required of employers in simple terms, offering explanations of pension terminology where necessary.” NEST transfers and contributions WITH EFFECT 1 April 2017, the restrictions on annual contributions and transfers into and out of NEST (National Employment Savings Trust) were removed following a government consultation (http://bit.ly/2q0Y259) and ensuing changes to legislation and NEST rules. From this date: ● there is no exit charge for members who want to transfer their NEST pot to another scheme ● funds transferred by members from other schemes into their NEST account will to be subject to NEST’s annual management charge of 0.3%, and ● the former annual limit on contributions to NEST ceased. Otto Thoresen, NEST chair, said: ‘‘It’s vital that small employers are able to choose NEST for auto enrolment without barriers. Employers told us that NEST’s contribution cap and restrictions on transfers would have made this difficult because they do not have the resources to run multiple schemes, so the removal of these constraints is welcome.”
Brexit uncertainty impacts retirement planning RESEARCH FROM Prudential shows that more than one in four people planning to retire this year fear the UK’s decision to leave the European Union (EU) will have a negative long-term effect on their retirement finances. The Class of 2017 research found that the referendum has already had an impact on 33% retiring this year, with 11% changing their retirement date as a result while 6% have changed the country they want to retire in, including some who had planned to stay in the UK now looking to move overseas. However, 67% say that the vote to leave the EU has had no impact at all on their retirement plans, and 12% believe that leaving the EU will be good for their long-term finances in retirement. Some 14% say they are worried about the negative impact of the post-referendum market volatility on their pension fund. Uncertainty caused by the decision appears to have underlined the value of financial advice to many of this year’s retirees, with 19% saying they are more likely to seek financial advice. Kirsty Anderson, a retirement expert at Prudential, said: “As you would expect, for many people who have been planning and saving for their retirement for most of their working lives, even the biggest of political upheavals won’t make a difference to their long-term plans. But with one in three new retirees telling us that their retirement plans have been affected by the referendum result, it is clear that uncertainty is having an impact for some.”
| Professional in Payroll, Pensions and Reward | June 2017 | Issue 31 36
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