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 touch
Why 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 5 million members
Managing over £17bn of members’ money
Dedicated consolidation team to help you every step of the way
Helping members save more by giving back £1m in reduced charges every month
Time and cost savings for youRead our corporate brochure
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 increase the quality of workplace pensions towards better member outcomes has meant tighter regulations and more scrutiny for trust-based occupational pension schemes.
Our key considerations guide – for single-employer defined contribution trusts covers the impact that these changes in regulations have had over the last few years, including:
- the removal of short service refunds
- the annual management charge cap for ‘qualifying schemes’
- an increasing emphasis on good governance
- requirements for further transparency in annual statements
- pressures to offer members better investment choices.
For employers with their own ‘in-house’ scheme, this means more time, cost and resources to meet these changing regulations and to support trustees. As a result, employers may need to consider reviewing the relationship between scale, cost, governance, sustainability, and ultimately their ability to continue operating in the pensions market.
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…