1. Thomson Directories
Pension Fund -
Management awards was a
size is not
everything
cclaim as the Small Scheme of the Year in this year's Pensions
tribute not only to the
effectiveness of the Thomson
Directories Pension Fund as a
small scheme, but also to the
overall quality of service and
benefits provided for iis members.
Commendation for scheme
management and trustee
excellence also reflected the
success of the scheme's
innovative communications and
in increasing membership by
more than 52% over the last three
years.
The scheme is a defined benefit
(DB) scheme with 600 active
members,403 deferred
pensioners a;rd 91 pensloners and
dependents and assets of some
€31m.
The company, publisher of the
Local Thomson Directory and
provider of business information,
with a workforce of 900, has
achieve{ a take up. rate of almost
70% - alevelwhiih is consldered
high in an industry with a large
sales force.
Benefits
Scheme members have a choice
of rwo accrual raies - a main
section offering pensions based
on a 1/65th of final salary for each
year of pensionable serrrice and
an alternative section providing
benefits based on 1/90'h.
Members may switch between
the rwo sections during service,
but the majority, on a ratio of 3 to
1, opt for the main section.
Death in service benefits are 4
times pensionable salary with
surviving spouses quali{ying for
50% of a member's pension and
dependent chtLdr en 25%.
Member contributions are 5.5%
of pensionable salary for
members of the main section and
4% for those opting for ihe
alternative section. Pensions in
payment are increased annually
by 5% or in line with the RPI.
The scheme is not contracted-
out and employees contribute to
receive full SERPS entitlement.
It is administered wholly in-
house and is overseen by five
trustee directors - two nominated
by active scheme members and
three who are senior members of
Thomson Directories Limited
management, one of whom is
chairman with a casting vote.
lnvestment
Two investrnent mana8ers -
Barclays Global Investors and
Britannic Asset Management - are
employed, each managing 50/o of
the schemes investments.
During the course of the year, the
scheme has adjusted its asset
allocalion to reflect the growing
maturity of the scheme with an
increasing number of pensionbrs
and deferred pensioners,
reducing its equity portfolio from
90% to 85% and increasing its
holdings in corporate and
government bonds from 10% to
75%.
Communication
Explaining Thomson
Directories' pensions philosophy,
Stephen Tiley, Pensions Managel,
emphasises the effort which has
gone into its promotion to
employees and effeitive, modern
and on-going communications.
"Thomson Directories offers an
attractive benefits package in
order to attract and retain high
quality staff.
Gaining appreciation of these
benefits is seen as a worthwhi,le
investment.
After a[ i{ you are paying for
expensive benefits you may as
well try to ensure your staff
appreclate them - then they are
more likely to stay with you!
"Smali schemes have limited
resources, but this need not
prevent them from excelling in
communicating the pensions
message. Innovation and personal
service can more than make up
for a limited communications
budget.
"Otlr 50% increase in active
membership in less than three
years has been the result of
effective communication, but
without using outside
consultants, or expensive
gimmicks." he said.
lntranet
Nevertheless, the scheme has
sought to exploit the
opportunities for greater
efficiency offered by new
technology and has introduced
an intranet site, with 'pensions
forecaster'. An on-line pensions
booklet has also been
developed in-house.
SteuenTiley (Ieft) receiaing the Pensions Management "Small Scheme of theYear
Award"
A targeted e-mail campaign,
with personal illustrations, has
been used to reach non-
members, and an easily
understood'question &
answer'1eaflet has been
produced.
Sponsorship
To help towards the cost of
producing pension booklets,
investment managers were
persuaded to sponsor the
booklets with advertisements - a
novel and cost effective
approach.
Personal contact, including the
unusual feature of a Pension
Fund ACM for members, with
lunch afterwards for pensioners,
is a hallmaik of the Thomson
Directories scheme, and one of
the idvantages of running a
small scheme.
Regional visits, with face-to-face
discussion with members and
potential members, have also
been arranged to emphasise the
real capital value of pension
benefits and to explain how most
of the cost of providing them is
met by the employer.
"In these meetings we are able
to speakin simple terms about
'stretching money over a possible
20-year retirement period' and
generate a greater understanding
of the enormous cost involved in
providing a decent pension and
the advantages of their employer
helping them to save for their
retirement," says Stephen Tiley.
"You have to be enthusiastic and
Iiterally'sell' the scheme. Iti been
known for non-members getin a
Lr'Jt with me on the ground floor
and be signed up members by the
fifth floor!"
Mis-selling
The scheme, on Stephen's advice,
has taken an active role in dealing
with the consequences of mis-
selling and the re-instatement of
members. To date more than
€500,000 has been paid into the
Fund, compensating members who
received bad advice, and members
have been assisted in taking cases
to the PIA Ombudsman, where
neceqsary, in oJder to obtain
reoress.
"I did not like seeing colleagues
ripped.off, and worse, fobbed off
when they tried to obtain redress,"
Stephen said. "Some advisers out
ihere still appear to be in a state of
denial over iheir role in pensions or
FSAVC mis-selling.
"For sma11 schemes, where
members are colleagues and
friends, personal communication is
vital. It is not necessadly a
question of how much you spend
on communicating but doing it
with siyie, enthusiasm, energy and
commitment. You don't have to
have cutting edge design, but if it's
avajlable in-house, and at 1ow cost
- then use it to help them to
appreciate whai's on offeq, and if
necessary, badger theml"