What can be done to benefit all savers?

On 26 April 2022, I joined David Fairs – Executive Director for Regulatory Policy, Analysis and Advice at The Pensions Regulator (TPR) and Phil Brown, Director of Policy and External Affairs – The People’s Pension at the roundtable debate to discuss various industry topics, such as value for money and how the framework can help savers. Many invited pension managers attended the event, and we enjoyed an interesting, lively debate.

A host of topics

The focus of the roundtable was topics which look to benefit all pension savers and will impact activity for all pensions professionals:

• Pension schemes – value for money: DC savers can only maximise their retirement income if their scheme delivers value for money
• Pension adequacy – the primary task of pensions is to secure an adequate income in retirement
• The pension journey – how to better support and engage members

Value for money in action

We discussed value for money and reached a clear view that it certainly should not be all about price and fund performance but encompass the broader governance, ethics, ambition, and quality of the end-to-end member experience when looking to select a pension provider. The value of the government sponsored pension dashboard to savers, its complexity for pension scheme and the impact was debated. At outset this will display the detail of savers individual pension pots and the amounts in each whilst signposting information relating to savings adequacy. This is now moving at pace with political imperative to deliver at least to the current timetable. Consensus was that this was a step forward in empowering savers but requiring the industry to step up in further meaningful support.

Pension adequacy – are members saving enough?

Adequacy needs addressing to meet the original ambition of the contribution levels set out in the 2005 Turner review. * There is consideration for a trigger point to determine when is good and fair to introduce further increases to contributions. Looking to the Australian model, the increased burden was placed on employers, but more evidence is needed to determine the best direction for the UK.

Research has revealed that most people who hold pensions are unaware that they are not saving enough for a ‘comfortable’ retirement. At best, they are only contributing enough for a ‘basic’ retirement. Policy needs to be looked at first to help close the savings gap and then the key thing will be in coordinating the policy, government messaging, providers and the activity of employers and advisers.

The pension journey – how do we engage with our savers?

We discussed the need to land key messages based on age, demographic as a journey to meet a variety of employee expectations ranging from: do it for me; guide me; do it myself; do it with an adviser.

The clear steer from the Employer attendees was that employees initially trusted coming to them for information rather than go directly to providers. Having relevant pre-prepared responses and links to communications toolkit material on the provider website and close support from their relationship manager to answer questions works and was highly valued. Once signposted, employees are happy to access the links to clear concise written content but especially like bite sized video and simple interactive tools.

We reflected on the chair’s statement which aims to provide members with a temperature check on their scheme and its ongoing activity. The view was that in most cases this was not in a format that was so accessible or valuable to members. Pleasingly, The People’s Pension’s recent suite of trustee question and answer member videos was championed as an exemplar in good communication which was gratifying. 

A hugely useful and informative session. I would like to thank all who took the time to attend and contribute.  If you are an adviser or employer wanting to talk to us about how we measure up or help with employee communications, please talk to your local contact, or call and speak to one of my team on 0333 2301 328 or email us at rrm@bandce.co.uk

* Read the Turner review