Pensions and the Cost-of-Living Crisis

Many employees are seeing their financial wellbeing impacted by the cost-of-living crisis, from their earnings and savings through to loans and cash worries. Employers are in a good position to provide access to support and advice and Alexander Beard can provide you and your clients with the expertise to help steer your staff through these turbulent times.

The Pensions Regulator, which governs Occupational Schemes in the UK, recently published a guidance statement setting out how trustees of defined contribution (DC) schemes and their advisers should support and communicate with members during the current economic climate. It urges trustees to review their governance structure, investment arrangements and communications.

Our Governance services focus on both the provision and management of employee benefits and employee communication and engagement strategies. We tailor these to meet the needs of the workforce, taking into account the specifics of benefits programmes and the individual’s level of knowledge and understanding. Taking time to understand each business, we can help clients to develop an effective communications plan to enhance their Employees financial knowledge and engagement with their benefits package.

The amount of advice and information available to individuals can seem overwhelming and the provision of smaller, targeted communications designed to meet the needs of staff can lead to better outcomes. We believe that communication strategies therefore need to be designed taking into account the workforce demographics, which would allow sessions to be linked to early, mid, late career and at Retirement.

Please contact Colin Nicol, Director of our employee benefits business if you feel you need assistance in this area Colin.Nicol@abg.net Automatic Enrolment Duties and Pension Scheme Governance Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called 'automatic enrolment'. If you employ at least one person you are an employer and you have certain legal duties. The Pensions Regulator (TPR) and Financial Conduct Authority (FCA) share the regulatory responsibilities for overseeing all Schemes and they have a common goal of encouraging both trustees and employers to establish good standards of governance. The six principles of governance outlined in the Pensions Regulator’s guidance comprise of:

An annual review and report can help Employer’s address these principles by

• Helping you to understand what is expected of you, in order that you can govern your scheme effectively

• Giving you the key information you need to monitor your scheme and administration easily

• Showing your scheme is aligned with TPR’s six principles and auto enrolment duties

• Highlighting any known tasks that must be carried out in the future

The production of this report is a demonstration of the governance framework in place.

The regulator also suggests that management committees could focus on a number of key areas when monitoring and reviewing their pension scheme, as follows:

We believe that linking your pension strategy with your overall people strategy is key to the success of both and they are interdependent in many aspects. Any considerations and changes within your people strategy could influence the pension strategy such as the design of the plan or the way you engage with your members.

Key considerations should include plan design (contributions and eligibility), communications (provider led and in house), default fund(s) and their performance and overall employee engagement in both the pension and wider benefits packages.

Colin Nicol

Pensions and Business Development Director Alexander Beard International Benefits (UK) Ltd.