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Start them young
Article in DC World, Professional Pensions, 15 September 2009
Each month DC World asks readers for their views. This month we ask: What more can be done to ensure people are aware of their options at retirement?
Clive Grimley, Partner, Barnett Waddingham
The Pensions Regulator is currently focusing on this and it will be one of the requirements of the NAPF’s forthcoming Pension Quality Mark for DC schemes.
Almost all members need some guidance to make decisions, ranging from:
• Basic information – For example, how state pension arrangements work.
This can be done by group presentations without need to discuss individual cases or provide independent financial advice
• Limited advice – For example, answering questions such as ‘should I join the scheme?’, or ‘what level of voluntary contributions would it be appropriate for me to pay?’
This can be done by announcements and group presentations, more personal comments will constitute financial advice. Many employers do not want to sponsor financial advice, although some may accept this if there is no cost to them, suggesting the use of commission.
• Complete retirement planning advice – This constitutes independent financial advice and, in my experience, is more of a personal thing rather than an employee benefit.
All of the above can be facilitated by written communications, online modeling tools, reminders to those members approaching retirement. Many members greatly value attending presentations or one to one meetings with a pensions professional.
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