The requirements for workplace pensions are onerous and not just in relation to the contributions employers have to pay.
Employers will need to set up a workplace pension for auto enrolment. Joining Cheviot is a very simple process and we will do everything we can to help employers deal with auto enrolment with the minimum of fuss or distraction to their business. Once you have chosen your workplace pension provider you will need to register your choice online with the Pensions Regulator.
Some existing pension arrangements, such as the Cheviot pension, may be suitable for auto enrolment. At Cheviot we have ensured the Cheviot Pension meets all the requirements for auto enrolment. Employers will need to check whether any existing schemes meet the requirements and how much support the scheme will provide to help the employer meet its new auto enrolment obligations.
In order to identify whether your Group Personal Pension arrangement fulfils these requirements, you will need to do some due diligence, consider whether the scheme has been established for the long term, whether the charges are fair and whether the investment options are looking to provide appropriate outcomes for members in terms of the ultimate pension.
For example, many investment options target a market related return. Members need a long term return relative to inflation in order to provide an adequate pension. Lifestyling provisions, which reduce risk as members approach retirement, are also good practice.
You may not have any governance around your group personal pension – many employers don’t. This principle requires you to ensure it is clear who is responsible for monitoring the different aspects of the scheme, including administration, advisers and investment issues on an ongoing basis.
Pensions and investments are complicated and technical areas. This principle requires that the governance surrounding the scheme is undertaken by individuals with a clear understanding of their duties and who have appropriate training to support their decision making. So if you are taking decisions you need to understand your duties.
Pension scheme governance is a long term business. This principle makes it clear that it is not enough to undertake due diligence at the setting up stage: the governance needs to be in place on an on-going basis which will require regular meetings and consideration of the arrangement.
You will probably know whether this is the case as your payroll staff or members will be complaining. Ensuring that members get regular and appropriate information is another aspect of the on-going governance.
Some member communications are better than others. Research suggests that most members find projected fund values at retirement very unhelpful and really need to see the estimated pension, in today’s terms, to achieve any level of engagement. Members may want to be able to receive communications in a variety of forms – some will be happy to receive everything on line via a website, others will find hard copy more accessible. Members often need to be able to ask questions. Many GPPs only offer help on line or through impersonal call centres. Will this meet your members’ needs?
Your time is valuable and we want you to spend it on your business.
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