Consolidation of trust-based occupational pensions
As trust-based occupational pension schemes face tighter regulations, you might be thinking about consolidation. Find out about our top tips for successful pension consolidation, and how we can help you save time and money.
Get in touchWhy consolidate with The People’s Pension?
The People’s Pension is a flexible, portable workplace pension, rewarding members not shareholders. As an authorised master trust we’re recognised and approved by The Pensions Regulator as a pension provider that’s properly run and completely focused on the needs of our members.
Trusted by over *6.5 million members
Managing over *£30 billion of members’ money
Dedicated consolidation team to help you every step of the way
Helping members save more by giving back over £2 million in reduced charges every month
Time and cost savings for you
Read our corporate brochure
*All figures correct as of October 2024.
Our top tips for successful trust-based pension consolidation
1. Make sure everyone’s on the same page
Consolidation often involves multiple stakeholders, namely scheme sponsors, advisers, employers, third-party administrators, lawyers and trustees. So, it’s important to make sure everyone is clear on what’s happening, when and why.
2. Have a realistic timeline with a project plan
The consolidation process can take time, so it’s wise to plan ahead. Have regular meetings with stakeholders and manage expectations. Have one person who oversees the process from start to finish and stick to an agreed timeline.
3. Discuss and agree criteria and priorities
What makes a good trust-based occupational pension scheme? Discuss and agree the specific criteria so any new solution meets everyone’s expectations.
4. Check the provider’s standards of governance
Take a look at The Pensions Regulator’s 21st Century Trusteeship campaign. This outlines their expectations around effective scheme management and how well-governed pension schemes should look.
5. Review your scheme rules
Do the trustees have rights to make transfers on behalf of members or is member consent required? Is there a set process and timescale required for member engagement and communication?
6. Think about potential costs
Costs to consider can include, legal and professional advice, data cleansing (especially for deferred members), communications and asset disinvestment charges.
Managing the transfer process through careful planning can help keep costs down. Check with any prospective new provider to see what implementation support is offered and if this involves cost.
Tighter regulations mean more time and cost
The government and The Pensions Regulator’s drive to focus on the value for money provided by workplace pensions to ensure better member outcomes has meant tighter regulations and more scrutiny for trust-based schemes, including:
- the requirement for certain smaller trust-based schemes to complete value for members assessments
- broadening investments in illiquid assets
- climate-related governance and reporting requirements for investments
- an increasing emphasis on data quality
- requirements for further transparency in chair’s statements
- a growing expectation to offer members a more complete journey from work into retirement; and
- keeping schemes compliant with the increasing pace of regulatory change eg stronger nudge to pensions guidance, pensions dashboards, changes to the normal minimum pension age, simpler annual benefit statements, transfers conditions to protect savers from scams, changes to the charge cap.
For employers with their own ‘in-house’ scheme, this means more time, cost and resources to meet these changing regulations and to support trustees, alongside increased risks and trustee liabilities. As a result, employers may need to consider reviewing the relationship between scale, cost, risk, governance, sustainability, and ultimately their ability to continue operating in the pensions market.
Next steps
Thinking about consolidating? Contact us to discuss if The People’s Pension can meet your needs and for more information on the support we can offer…