How to choose the
best scheme for
your employees
Morten Nilsson
CEO | NOW: Pensions

Smarter. Simpler. Better.
Smarter. Si...
About us
• NOW: Pensions is a UK
multi-employer trust

What we offer

• Launched January 2012
and already servicing
600,00...
A responsibility to your employees
• Picking the right scheme for your employees is imperative
• They have no say or influ...
A responsibility to your firm
• Auto enrolment is complex – you need a provider who
will help to keep it as simple and has...
What do
employees want?

Smarter. Simpler. Better.

@nowpensions
5

5
Smarter. Simpler. Better.
Smarter. Simpler. Better.

@nowpensions
6

6
Smarter. Simpler. Better.
Smarter. Simpler. Better.

@nowpensions
7

7
Smarter. Simpler. Better.
Smarter. Simpler. Better.

@nowpensions
8

8
Smarter. Simpler. Better.
Smarter. Simpler. Better.

@nowpensions
9

9
What does this research tell us?
• Pensions are rated highly as part of the overall
comp & bens package
• High employer co...
An obligation or an
opportunity?
Smarter. Simpler. Better.

@nowpensions
11

11
Compliance or something more?
• Basic compliance is the route currently favored
by most employers

• Give consideration to...
What does a
good scheme
look like?

Smarter. Simpler. Better.

@nowpensions
13

13
Value for money In pensions
On 16 January, the Pensions Institute at Cass Business School published a
report examining wha...
Charges do matter
Somebody who saves from age 22 to 68 based on
average salary and 8% contribution:

• Pay 1% AMC and lose...
Help to identify a good scheme
Pension Quality Mark
• Set up in 2009 to recognise good DC pensions
• PQM Ltd not-for-profi...
Summary

Smarter. Simpler. Better.

@nowpensions
17

17
Securing the right scheme
• 2014 is going to be busy - 30,000 companies staging over a four
month period in mid-2014
• Pla...
Don’t assume the legislation will remain static
• Pensions Minister keen to introduce “pot follows member” for AE
• A cap ...
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How to identify the right scheme for your firm

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How to identify the right scheme for your firm by Morten Nilsson, CEO NOW: Pensions.

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  • Survey probed attitude towards pensions as part of the overall compensation and benefits package
  • Cass found companies with around 1,000 employees who failed to communicate their benefits packages spent on average £470,000 a year more on staff turnover and absence than companies with good benefit communication programmes.
  • Cass found companies with around 1,000 employees who failed to communicate their benefits packages spent on average £470,000 a year more on staff turnover and absence than companies with good benefit communication programmes.
  • Cass found companies with around 1,000 employees who failed to communicate their benefits packages spent on average £470,000 a year more on staff turnover and absence than companies with good benefit communication programmes.
  • In January the Cass Business School published a report examining value for money in pension schemes. After an indepth period of research they concluded that value for money schemes comprise the following elements.If all schemes followed these principles, savers would have much greater confidence that their pension was going to deliver on its promises
  • At the moment design of default funds is not included in the PQM assessment but a consultation is underway regarding its inclusion which NOW: Pensions fully supports
  • At the moment design of default funds is not included in the PQM assessment but a consultation is underway regarding its inclusion which NOW: Pensions fully supports
  • How to identify the right scheme for your firm

    1. 1. How to choose the best scheme for your employees Morten Nilsson CEO | NOW: Pensions Smarter. Simpler. Better. Smarter. Simpler. Better. @nowpensions 1 1
    2. 2. About us • NOW: Pensions is a UK multi-employer trust What we offer • Launched January 2012 and already servicing 600,000 + employees • Parent company is ATP, Denmark’s leading pension provider • ATP has £74bn FUM and 4.7 million members • Low costs • High quality • Simple proposition • Cater for all employers and every type of employee • A modular solution Smarter. Simpler. Better. @nowpensions 2 2
    3. 3. A responsibility to your employees • Picking the right scheme for your employees is imperative • They have no say or influence in the decision making process • They are being passively enrolled • You have their retirement fortunes in your hands • It’s a big responsibility Smarter. Simpler. Better. @nowpensions 3 3
    4. 4. A responsibility to your firm • Auto enrolment is complex – you need a provider who will help to keep it as simple and hassle free as possible: ✓Handle assessment and opt-outs / opt-ins (when your payroll doesn’t do this) ✓Handle all statutory communications ✓Interface seamlessly with payroll • Robust proposition that won’t let you or your employees down • Low cost to you and your employees Smarter. Simpler. Better. @nowpensions 4 4
    5. 5. What do employees want? Smarter. Simpler. Better. @nowpensions 5 5
    6. 6. Smarter. Simpler. Better. Smarter. Simpler. Better. @nowpensions 6 6
    7. 7. Smarter. Simpler. Better. Smarter. Simpler. Better. @nowpensions 7 7
    8. 8. Smarter. Simpler. Better. Smarter. Simpler. Better. @nowpensions 8 8
    9. 9. Smarter. Simpler. Better. Smarter. Simpler. Better. @nowpensions 9 9
    10. 10. What does this research tell us? • Pensions are rated highly as part of the overall comp & bens package • High employer contributions and certainty over outcomes are top priorities • Investment choice is a low priority • Employees want to improve their pensions knowledge and want their employer to help them understand Smarter. Simpler. Better. @nowpensions 10 10
    11. 11. An obligation or an opportunity? Smarter. Simpler. Better. @nowpensions 11 11
    12. 12. Compliance or something more? • Basic compliance is the route currently favored by most employers • Give consideration to providing a package above the minimum – it may not be as costly as you think • Well communicated benefits improve employee retention and productivity • You can offer different provision to different employee categories • Employees want to be taken care of and guided in complicated financial matters like pensions Smarter. Simpler. Better. @nowpensions 12 12
    13. 13. What does a good scheme look like? Smarter. Simpler. Better. @nowpensions 13 13
    14. 14. Value for money In pensions On 16 January, the Pensions Institute at Cass Business School published a report examining what value for money means in pension schemes. The report surmised: 1. A TER (total expense ratio) in the region of 0.5% 2. A well-designed multi-asset default fund with a glide path that is subject to regular modelling scrutiny 3. Expert independent governance fully aligned with all members’ interests including both active and deferred 4. Effective member communications that focus on improving the outcome for members 5. An efficient consolidation system that helps members to transfer older DC pots to the new scheme 6. A decumulation service that is part of the scheme and provided by a specialist Source: “Value for money” Pensions institute report launched 16 January 2014. The report was co-sponsored by NOW: Pensions Smarter. Simpler. Better. @nowpensions 14 14
    15. 15. Charges do matter Somebody who saves from age 22 to 68 based on average salary and 8% contribution: • Pay 1% AMC and lose 24% of total pension pot to charges • Pay 0.75% AMC and lose 19% of total pension pot to charges • Pay 0.50% AMC and lose 13% of total pension pot to charges • Pay 0.3% AMC and £1.50 per month admin charge (NOW: Pensions’ model) and 8% of the pot is lost to charges Smarter. Simpler. Better. @nowpensions 15 15
    16. 16. Help to identify a good scheme Pension Quality Mark • Set up in 2009 to recognise good DC pensions • PQM Ltd not-for-profit and supported by NAPF • Supported by Government, regulators, employer, industry & consumer groups • 186 employers have ‘classic’ PQM for their scheme PQM Ready • Set up in Feb 2013 to recognise quality Master Trusts • NOW: Pensions was the first master trust to attain PQM READY status • Standards on comms, governance and charges • 6 Master Trusts have gained PQM READY Smarter. Simpler. Better. @nowpensions 16 16
    17. 17. Summary Smarter. Simpler. Better. @nowpensions 17 17
    18. 18. Securing the right scheme • 2014 is going to be busy - 30,000 companies staging over a four month period in mid-2014 • Plan ahead and don’t make any assumptions – the market is shifting - don’t assume your existing providers will be suitable or willing to accept your entire workforce • AE doesn’t have to be a trade off between good value for employer and good value for employees • Keep it simple – complexity adds cost but delivers little extra value Smarter. Simpler. Better. @nowpensions 18 18
    19. 19. Don’t assume the legislation will remain static • Pensions Minister keen to introduce “pot follows member” for AE • A cap on workplace pension charges likely – but perhaps not soon • The government might increase minimum contributions – there is widespread consensus that 8% contribution won’t be enough to ensure a comfortable retirement Smarter. Simpler. Better. @nowpensions 19 19

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