Charge rebate now £1 million a month

The People’s Pension gives back more than £1 million a month to members

The People’s Pension1 has today (October 4th) revealed that it now gives back more than £1 million a month to its members in the form of rebates on its annual management charge (AMC).

Its charging structure consists of three components:

  • an annual charge of £2.50 – equivalent to 21p a month
  • a management charge of 0.5% of the value of a member’s pension pot each year
  • a rebate on the management charge (between 0.1% on savings over £3,000 and 0.3% on savings over £50,000)2

This charging structure was introduced to reward its members for saving more and to reduce the cross subsidy by active members to millions of small, inactive pots which are increasingly created by auto-enrolment.

Since the rebate was introduced last year, The People’s Pension, provided by not-for-profit organisation B&CE2, has, given back more than £12.5 million to its members who have pots above the required threshold.  This figure is only set to increase as individual pots grow, with members on the current structure projected to receive a total rebate of £34.5 million a year in five years’ time.

This comes as the Government is running a consultation on the proposed introduction of a universal charging structure, which could see combination and graduated charging structures, such as the rebate given by The People’s Pension, no longer permitted.

Patrick Heath-Lay, CEO of B&CE, provider of The People’s Pension, said:

“As the UK’s largest independent master trust, we have a responsibility to do what’s best for our 5 million members. This charging structure rewards our members for saving more by using our profits to directly benefit them and improve their chance of a better retirement.

“As automatic enrolment matures, the number of people benefiting from this as well as the total size of the rebate we pay out will grow considerably and could help members to save thousands more towards their futures3.”


The People’s Pension bolsters Trustees with appointments

The People’s Pension bolsters Trustee Board with two new appointments

Baroness Jeannie Drake CBE and consulting actuary Mark Condron have been appointed to The People’s Pension Board of Trustees.

Both joined the Trustee this month, bringing a wealth of expertise and experience to the leading master trust which provides auto-enrolment pensions to one in six workers across the UK.

Baroness Drake is a former member of the Turner Pension Commission which recommended the introduction of auto-enrolment. She was also on the Board of the Pension Protection Fund, the Board of The Pensions Advisory Service, and was Acting Chair of PADA, the forerunner of NEST.

She has more than 30 years’ experience in the trade union movement, including as President of the Trade Union Congress (TUC) and was a member of the Equal Opportunities Commission.

Mark Condron joins the Trustee after 30 years’ experience at Mercer, where he was  a scheme actuary, senior partner, and non-executive member of the company’s audit committee. He is also an independent trustee on the Scottish & Newcastle Pension Plan, part of Heineken.

Steve Delo has been re-appointed as Chair of Trustee for a further three years, while Sue Lewis has stepped down after coming to the end of her tenure.

Commenting on the appointments, Trustee Chair, Steve Delo, said:

“I’m delighted to welcome both Baroness Drake and Mark Condron to the Board. They each have top class reputations and will reinforce our high governance standards.

“The Scheme has gone from strength to strength and recruiting quality Trustee Directors with complementary skills is an essential part of managing that growth.

“I’d also like to thank Sue Lewis, who has completed her term having been a tenacious, highly member focused Board member.”

Responding to the announcement, Baroness Drake said:

“Auto-enrolment has been a success in delivering for the public good by getting millions of workers to start saving or saving more. A requirement of continuing success is that pension funds deliver good quality provision to low and middle earners.

“The People’s Pension has grown rapidly in the last few years and I am privileged to join the Trustee board and to contribute to protecting the interests of its nearly 5 million members.”

Commenting on his appointment, Mark Condron said:

“I’m delighted to be appointed as a Trustee of The People’s Pension at this important time. I am joining a great team, completely committed to helping members build better outcomes in retirement.”


The People’s Pension moves to combination charge

The People’s Pension moves to a combination charge structure

One of the UK’s largest auto-enrolment pension providers has modified its charging structure, to make it fairer and futureproof against the ongoing impact of COVID-19.

A new annual charge of £2.50 – equivalent to just 21 pence a month – has been added to the charging structure for all members of The People’s Pension. Given the current volatile financial climate, this annual charge will be deducted from member’s pension pots later in the scheme year.

The new combination charge structure reduces the cross subsidy by active members of millions of small, inactive pots which are increasingly created by auto-enrolment.

It also cushions the effect on scheme revenues of the extreme market volatility sparked by the COVID-19 global pandemic crisis.

The new combined Annual Management Charge will consist of 3 components:

  • annual charge (£2.50 deducted during each scheme year)
  • management charge (0.5%)
  • rebate on the management charge (between 0.1% on savings over £6,000 and 0.3% on savings over £50,000)

To further encourage active savers, The People’s Pension will halve the starting rate for a rebate on its management charge to £3,000 from £6,000, to encourage members to save more for their retirement and consolidate their pots. Nearly half a million of The People’s Pension members would benefit currently. This will be implemented later this year.

As an illustrative example of the new combined charge structure’s impact in encouraging long term saving: a member on an annual salary of £20,000 with an initial pension pot of just £3,000, if they save with The People’s Pension for twenty years, could be paying the equivalent of just 0.3% in total annual management charges.

Commenting, Patrick Heath-Lay, Chief Executive Officer for B&CE, said:

“As we evolve our charging approach to meet changing requirements, we think this approach combines fairness, incentives to save, and prudence. Our modified charging structure cuts fees as members save more, reduces the cross subsidy from actively saving members to inactive small pots, and futureproofs revenues against the unpredictable financial impact of COVID-19.

“These changes ensure we offer fantastic value for money to active savers of all types.”


The People’s Pension launches manifesto

The People’s Pension launches manifesto ahead of 2019 General Election

The People’s Pension has today called for a package of measures from the next Government to make saving pay for the low paid, reduce the gender pensions gap, and make pensions more transparent.

Although auto-enrolment has been a success so far, with 10 million more people now saving for retirement, the workplace pension provider’s new manifesto also underlines the need to ensure people are saving enough for a comfortable retirement and millions of workers aren’t unnecessarily excluded from auto-enrolment.

With just 30 days before the nation goes to the polls, it calls on the next Government to:

  • End the ‘net-pay anomaly’ which deprives an estimated 1.75m low earners of much-needed tax relief through auto-enrolment.
  • Extend auto-enrolment to millions more workers and help people save more by making pension contributions begin from the first pound of earnings; lowering the eligible age for auto-enrolment to 18; and reducing the earnings requirement to the primary National Insurance threshold of £8632.
  • Introduce a universal flat rate tax relief between 25-30 per cent to increase the pensions savings of those who need it most.
  • Reduce the gender pensions gap by accepting the principle that caring is an economic activity which should attract workplace pensions contributions.
  • Support a one stop shop, publicly operated pensions dashboard free from commercial sales pitches, featuring all pensions entitlements from day one, and with pension charges disclosed in a standard format.

Commenting, Gregg McClymont, director of policy at The People’s Pension, said:

“The topic of pensions may not be a vote winner like the NHS or Brexit, but with millions of people at risk of not having enough to live on in retirement, it’s an issue that all politicians should care about and act on.

“There can be no doubt of the positive impact that auto-enrolment has had, but the next Government must work to ensure that people are saving enough for a comfortable retirement and that millions of workers – in particular women – aren’t unnecessarily excluded from auto-enrolment.

“We’re calling on future ministers to stop women’s financial futures from being penalised because they choose to have children, and ask that the next Government ensures savers can access all their pensions information on a one stop shop dashboard that’s operated in their best interest and free from commercial sales pitches.

“Pensions matter; which is why we’re launching this manifesto and asking those who seek to represent us to prioritise improving the system.”


New Chief Finance Officer hired at The People’s Pension

New Chief Finance Officer hired at B&CE, provider of The People’s Pension

B&CE, provider of The People’s Pension, has appointed Sue Hunter from the Legal and General Group, to join the leading master trust as its Chief Finance Officer.

During her long tenure at L&G, she has held a variety of finance director roles in the savings, corporate and business performance divisions. She is also a member of the Chartered Institute of Management Accountants (ACMA). Sue will join B&CE on November 12, when she will take responsibility for the company’s financial strategy.

Commenting on her appointment, she said: “I am extremely excited to have been appointed to the role of chief finance officer at B&CE, a company which, through The People’s Pension, has developed into one of the leading auto-enrolment providers in the country. It is a tremendous honour to join such a forward-thinking business, one which always puts the interests of its 4.5 million members first.”

Patrick Heath-Lay, Chief Executive Officer at B&CE, said: “We are delighted to welcome Sue into the B&CE family as she brings with her a wealth of experience and first-class leadership qualities. As our chief finance officer, she will play a crucial role in the continued growth of B&CE and The People’s Pension.”


The People’s Pension granted master trust authorisation

The People’s Pension is granted master trust authorisation

The People’s Pension, one of the UK’s largest master trusts, has been granted master trust authorisation from The Pensions Regulator (TPR).

Trustees of master trusts were given six months to apply for authorisation and show their scheme met the five criteria laid out in legislation:

  • demonstrating the people running their scheme were fit and proper
  • the master trust was financially sustainable
  • the funder of the scheme could support it
  • the master trust had adequate systems and processes in place
  • a continuity strategy had been prepared.

Commenting on being granted master trust authorisation, Patrick Heath-Lay, CEO of B&CE, provider of The People’s Pension, said:

“We are delighted to receive master trust authorisation; it’s reward for all the hard work that has gone into building The People’s Pension into one of the UK’s largest master trusts, now serving more than four-and-a-half-million savers and 88,000 employers across the country.

“For our members and employers, authorisation offers peace of mind. But at The People’s Pension we know that this is just the beginning – rightly – of much closer ongoing regulation of master trust provision.

“We anticipate further change as the authorisation process beds in, as auto-enrolment continues to grow in importance, and discussions about the regulation of the master trust ‘at retirement’ market develop. Our size and strength mean we are well placed to face the future.”


Workplace pensions provider to cut fees to benefit members

Leading not-for-profit workplace pensions provider to cut fees as it returns profits to members, saving them thousands more across their lifetime

The People’s Pension1, a leading, not-for-profit workplace pension provider, has today revealed plans to return profits to members by cutting fees, potentially saving people thousands more towards their retirement.

With auto-enrolment maturing, pension pots growing, and contributions set to rise further to eight per cent from April this year, the rapidly growing master trust will this summer move from its already low-cost AMC of 0.5 per cent to a banded pricing structure. Member charges as a percentage, will fall as their pension pots grow, giving them a long-term incentive to stick with auto-enrolment saving and to consolidate multiple pots.

The new pricing structure immediately reduces the fee revenue which The People’s Pension receives from its membership’s Annual Management Charges (AMC) by 10 per cent.

An average earner saving over their working life with The People’s Pension could see their lifetime AMC fall by more than half to just 0.23%2, potentially increasing their pension pot at retirement by:

  • almost £55 000 when compared to a lifetime fee set at the charge cap of 0.75% – nearly five years additional retirement income3
  • almost £30 000 when compared to a lifetime fee set at the already low 0.50% which members of The People’s Pension currently pay – nearly three years additional retirement income4

A member’s AMC will reduce as their savings increase through the following bands5, with the charge they pay shown simply and transparently in pounds and pence each month in their online account.

Commenting on this announcement, Patrick Heath-Lay, CEO of B&CE, provider of The People’s Pension, said:

“Auto-enrolment is on the cusp of a significant landmark, with contributions set to rise for 10 million savers across the UK. Providers need to respond imaginatively to ensure auto-enrolment is attractive over the long-term, rewards people for saving and incentivises the consolidation of multiple pots.

“Charges can eat away at pensions, and on a flat-rate, percentage fee savers pay a lot more in pounds and pence the more they save. We’re reducing members annual charges as a percentage of their savings in line with the growth of their pot, potentially boosting their retirement income by thousands.

“The People’s Pension led the auto-enrolment market by offering all employers, whether large or small, the same uniform single charging structure for their employees, removing a sense of unfairness in industry charging practices. We’re taking this approach further by offering all members the same clear incentive to save for the long-term. We urge the industry to follow suit.”


B&CE appoints Stella Beale as Director of Marketing

B&CE appoints Stella Beale as Director of Marketing

Stella previously held roles at Mercer Consulting where she was European Marketing Leader-Investments & Retirement, as well as a range of marketing and customer focused roles at MetLife Assurance, Legal & General, RBS and American Express.

Stella is responsible for developing the marketing, events and brand strategic plans to generate positive brand awareness across B&CE’s money and health business areas.

Commenting on her appointment, she said:

“I have joined B&CE at a very exciting time and I look forward to continuing to develop the brand to accommodate their growing business. B&CE values and guiding principles of ensuring all they do is in the best interest of their members; customers and their own employees really resonate with me and I am delighted to be a part of such a forward thinking and customer focused organisation.”

Commenting on Stella’s appointment, Roy Porter, Group Director of Sales and Marketing said:

“We’re delighted to welcome Stella into the team permanently. She’s already made an incredibly positive impact on the company in her time here as Interim Director of Marketing, so we’re thrilled that she will continue to lead on our marketing activities, particularly shaping and developing our brand and building straightforward and easy to understand communications that meet our audiences’ needs.”


The People’s Pension invests in ESG fund

The People’s Pension newly invests in fund combining ESG and factors to reduce fossil fuel exposure

The People’s Pension1, a leading not-for-profit master trust in the UK, has this week invested in the State Street2 ACS Multi-Factor Global ESG Equity Index Fund, in order to reduce exposure to ESG factors including fossil fuels, as part of its wider work on responsible investment.

The fund, which targets the MSCI3 World Select 5-Factor ESG Low Carbon Target, has a blend of smart beta factors and ESG characteristics. It targets five well-established equity factors, improved ESG scores and a reduction in carbon emissions and reserves intensity.

Commenting, Nico Aspinall, Chief Investment Officer at B&CE, provider of The People’s Pension, said:

“Factors offer a different way of constructing portfolios for members and we expect it will reduce the risk of our holdings overall whilst achieving their targets. We also recognise the importance of ESG as a financial factor and the screen we apply keeps the worst companies out of the portfolio, reducing fossil fuel exposures as a result.”

Guido Giese, Executive Director of MSCI, added:

“Institutional investors are increasingly seeking to incorporate ESG considerations into factors. This Index aims to incorporate ESG-based and carbon-based constraints in a bottom-up index construction approach.”

Daniel Leuty, UK Head of DC Clients and Financial Institutions at State Street, said:

“The launch of the State Street ACS Multi-Factor Global ESG Equity Index Fund continues to build on our belief and commitment to ESG and factor investing and delivering these capabilities to our clients and the wider market.  State Street and The People’s Pension are fully aligned in the belief that climate change presents material, uncompensated risks to long-term investors, and this strategy was designed to protect and benefit the portfolio over the long-term.”


B&CE appoints Tim Gosling as new head of policy

B&CE appoints Tim Gosling as new head of policy

Joining B&CE from the Pensions and Lifetime Savings Association (PLSA) where he has been DC policy lead since 2015, Tim will work to develop B&CE’s pension policy. This will include the advantages of the not for profit with scale model in delivering value for money in DC pensions, extending the advantages of this model to and through retirement, and finding a solution to the growing small pots challenge, via consolidation.

Gregg McClymont, director of policy & external affairs at B&CE said:

“I’m delighted to welcome a technical policy expert of Tim’s calibre to B&CE. With his professional background in the not for profit trust-based pensions sector and at our trade body, he’s a great fit for The People’s Pension1.”

Tim’s appointment begins on Monday 15 October 2018.

Commenting on his appointment, Tim Gosling2 said:

“I’m excited to be joining The People’s Pension – a leading pension scheme that genuinely puts the saver at the heart of everything it does. This is an exciting time for pensions policy and I’m looking forward to joining such a strong team.”

The appointment comes following the departure of former Head of Policy and Government Relations, Andy Tarrant, who will continue to work on special projects for B&CE.