Spence Defined Contribution
Defined Contribution Pension Scheme Services
Defined Contribution Pension Scheme Services
Spence & Partners provides a range of insured defined contribution (DC) pension consulting services designed to accommodate employers’ various needs. We recognise that the employers we meet will have reached different points in relation to the evolution of their workplace pensions strategies and their wider employee benefits strategies. As recently as five years ago, some of the UK’s larger employers may have thought that their DC journey was reaching a plateau following the typical move away from defined benefit (DB) provision. Little did they know what was just around the corner: • Auto Enrolment. • The increasing attraction of bundled DC products. • The rising popularity of the DC master trust. • The Pension Regulator’s increased focus on trust-based DC arrangements. • The spotlight placed on the quality aspects and charges levied within DC arrangements. • The abolition of DC product commissions often impacting on the company’s overall pension budget. • The introduction of a charge cap and minimum quality features. • The introduction of new flexibilities in how DC pension benefits are accessed by members. • The advent of a ‘third way’ pension arrangement: collective DC pensions.
And this is just the beginning: there are key policy decisions which are likely to surface over the short term including: • Increase of the 8% minimum Auto Enrolment contribution. • The merger of PAYE and NICs and the implications for salary sacrifice arrangements. • Pensions tax relief reform. • The merger of pensions and ISAs within a new incentivisation structure. All that seems certain is that finance directors and HR directors will be faced with further decisions around how staff should be rewarded. In addition, employers can expect far greater employee interest in the pension offering, driven principally by the introduction of new flexibilities and inheritance tax sheltering expected from April 2015.
How we can help Whilst we are small enough to provide bespoke DC pensions consulting services, we typically find that most employers are seeking help with the following broad questions: How do I achieve Auto Enrolment compliance? We usually suggest that a full audit of the existing DC arrangement is the best place to start. This then allows you to understand the degree to which any existing scheme meets the Auto Enrolment ‘Qualifying Scheme’ status. This will give you an indication of any changes that might have to be made and the foundation for seeking the most appropriate advice and assistance. How can I measure how my current DC scheme shapes up? Reviewing the following key ingredients of your current DC arrangement will help ensure that you offer a sustainable DC pension arrangement focussed on providing good member outcomes. Charges - Reviewing costs and charges is important to help you assess your scheme’s value for money. You should seek to understand all the costs and charges that apply to the scheme or the investment funds used by the scheme. Auto Enrolment compliance - UK employers have to automatically enrol their staff into a workplace pension if they meet certain criteria. The law on workplace pensions has now changed and every employer must comply. Investment strategies - Ensuring that the default strategy and other investment options continue to be suitable for members.
Member engagement - The retirement outcome that a member receives is more likely to be improved when they engage on key issues. You should make sure that communications meet the needs of members from when they join the scheme until the time that they retire. April 2015 readiness - From age 55 there will be more flexibility in how an employee is able to use their defined contribution pension pot, whatever it’s size. They require the right advice to choose the right option for them. Quality of pension provider services - The Pensions Regulator (TPR) DC Code of Practice 13 compliance sets out the legal requirements and standards of governance and administration that trustees of occupational defined contribution (DC) trust-based schemes need to attain. Is Auto Enrolment my only concern? With all the recent changes and alterations to regulation and the DC landscape, an audit of your current pension arrangements can not only ensure compliance with Auto Enrolment but present opportunities previously unavailable. In particular, employer cost savings (or the ability to redeploy spend where it has the greatest benefit) are often facilitated in the following areas: • Considering a move from sponsoring unbundled DC schemes to a bundled DC scheme. • Moving ‘own trust’ schemes to be housed within a master trust. • Introducing a pension salary sacrifice arrangement. Our report would include our opinion as to the appropriateness of the existing scheme to meet the qualifying scheme requirements, given the various DC products available. We consider whether a market review looks sensible and, if so, we can project manage both this exercise and the route to Auto Enrolment compliance.
Spence & Partners Spence & Partners is a privately owned UK firm of actuaries, pension consultants and administrators. Established in 2000, our business has grown steadily since; we employ approximately 100 staff across offices in London, Glasgow and Belfast. Spence provides support services to employers and trustees operating workplace pension schemes. Our clients range from large UK PLCs and major Government bodies to small to medium sized schemes, requiring engaged and proactive advisers, actuaries and administrators.
We provide full pension actuarial, consulting and administration services for over 50 schemes and advisory and support services to over 100 trustee boards and sponsoring employers. Our focus on using innovative and technological solutions provides a more efficient and cost effective service. Our professional, caring and approachable team ensures that we are able to provide the very best service for our clients.
Michael Spink BSc (Econ) Hons APMI ACII CertPFS Head of Defined Contribution Practice
Mike entered the pensions industry in 1981 and for the last 20 years has specialised in managing defined contribution pension arrangements (both trust and contract) with advice provided to companies, trustees and members. A key focus of Mike’s work is to guide clients through the fast-evolving world of DC, ensuring that whichever DC structure is chosen, member outcomes are optimised. Mike also specialises in advancing member engagement via the delivery of jargon-free pension communications and presentations.
“The DC landscape has recently undergone a multitude of changes that present some new obligations and opportunities for employers. It’s a great time to be able to help use these changes to help clients realise good outcomes for their scheme members.”
Spence & Partners Limited 22 Great Victoria Street Belfast BT2 7BA T : +44 (0) 28 9041 2000 4 West Regent Street Glasgow G2 1RW T : +44 (0) 141 331 1004 1 Berkeley Street London W1J 8DJ T : +44 (0) 20 7495 5505 E : [email protected] spenceandpartners.co.uk
Authorised and regulated by the Financial Conduct Authority. Registered No. NI37760
Defined Contribution Pension Scheme Services
Spence & Partners provides a range of insured defined contribution (DC) pension consulting services designed to accommodate employers’ various needs. We recognise that the employers we meet will have reached different points in relation to the evolution of their workplace pensions strategies and their wider employee benefits strategies. As recently as five years ago, some of the UK’s larger employers may have thought that their DC journey was reaching a plateau following the typical move away from defined benefit (DB) provision. Little did they know what was just around the corner: • Auto Enrolment. • The increasing attraction of bundled DC products. • The rising popularity of the DC master trust. • The Pension Regulator’s increased focus on trust-based DC arrangements. • The spotlight placed on the quality aspects and charges levied within DC arrangements. • The abolition of DC product commissions often impacting on the company’s overall pension budget. • The introduction of a charge cap and minimum quality features. • The introduction of new flexibilities in how DC pension benefits are accessed by members. • The advent of a ‘third way’ pension arrangement: collective DC pensions.
And this is just the beginning: there are key policy decisions which are likely to surface over the short term including: • Increase of the 8% minimum Auto Enrolment contribution. • The merger of PAYE and NICs and the implications for salary sacrifice arrangements. • Pensions tax relief reform. • The merger of pensions and ISAs within a new incentivisation structure. All that seems certain is that finance directors and HR directors will be faced with further decisions around how staff should be rewarded. In addition, employers can expect far greater employee interest in the pension offering, driven principally by the introduction of new flexibilities and inheritance tax sheltering expected from April 2015.
How we can help Whilst we are small enough to provide bespoke DC pensions consulting services, we typically find that most employers are seeking help with the following broad questions: How do I achieve Auto Enrolment compliance? We usually suggest that a full audit of the existing DC arrangement is the best place to start. This then allows you to understand the degree to which any existing scheme meets the Auto Enrolment ‘Qualifying Scheme’ status. This will give you an indication of any changes that might have to be made and the foundation for seeking the most appropriate advice and assistance. How can I measure how my current DC scheme shapes up? Reviewing the following key ingredients of your current DC arrangement will help ensure that you offer a sustainable DC pension arrangement focussed on providing good member outcomes. Charges - Reviewing costs and charges is important to help you assess your scheme’s value for money. You should seek to understand all the costs and charges that apply to the scheme or the investment funds used by the scheme. Auto Enrolment compliance - UK employers have to automatically enrol their staff into a workplace pension if they meet certain criteria. The law on workplace pensions has now changed and every employer must comply. Investment strategies - Ensuring that the default strategy and other investment options continue to be suitable for members.
Member engagement - The retirement outcome that a member receives is more likely to be improved when they engage on key issues. You should make sure that communications meet the needs of members from when they join the scheme until the time that they retire. April 2015 readiness - From age 55 there will be more flexibility in how an employee is able to use their defined contribution pension pot, whatever it’s size. They require the right advice to choose the right option for them. Quality of pension provider services - The Pensions Regulator (TPR) DC Code of Practice 13 compliance sets out the legal requirements and standards of governance and administration that trustees of occupational defined contribution (DC) trust-based schemes need to attain. Is Auto Enrolment my only concern? With all the recent changes and alterations to regulation and the DC landscape, an audit of your current pension arrangements can not only ensure compliance with Auto Enrolment but present opportunities previously unavailable. In particular, employer cost savings (or the ability to redeploy spend where it has the greatest benefit) are often facilitated in the following areas: • Considering a move from sponsoring unbundled DC schemes to a bundled DC scheme. • Moving ‘own trust’ schemes to be housed within a master trust. • Introducing a pension salary sacrifice arrangement. Our report would include our opinion as to the appropriateness of the existing scheme to meet the qualifying scheme requirements, given the various DC products available. We consider whether a market review looks sensible and, if so, we can project manage both this exercise and the route to Auto Enrolment compliance.
Spence & Partners Spence & Partners is a privately owned UK firm of actuaries, pension consultants and administrators. Established in 2000, our business has grown steadily since; we employ approximately 100 staff across offices in London, Glasgow and Belfast. Spence provides support services to employers and trustees operating workplace pension schemes. Our clients range from large UK PLCs and major Government bodies to small to medium sized schemes, requiring engaged and proactive advisers, actuaries and administrators.
We provide full pension actuarial, consulting and administration services for over 50 schemes and advisory and support services to over 100 trustee boards and sponsoring employers. Our focus on using innovative and technological solutions provides a more efficient and cost effective service. Our professional, caring and approachable team ensures that we are able to provide the very best service for our clients.
Michael Spink BSc (Econ) Hons APMI ACII CertPFS Head of Defined Contribution Practice
Mike entered the pensions industry in 1981 and for the last 20 years has specialised in managing defined contribution pension arrangements (both trust and contract) with advice provided to companies, trustees and members. A key focus of Mike’s work is to guide clients through the fast-evolving world of DC, ensuring that whichever DC structure is chosen, member outcomes are optimised. Mike also specialises in advancing member engagement via the delivery of jargon-free pension communications and presentations.
“The DC landscape has recently undergone a multitude of changes that present some new obligations and opportunities for employers. It’s a great time to be able to help use these changes to help clients realise good outcomes for their scheme members.”
Spence & Partners Limited 22 Great Victoria Street Belfast BT2 7BA T : +44 (0) 28 9041 2000 4 West Regent Street Glasgow G2 1RW T : +44 (0) 141 331 1004 1 Berkeley Street London W1J 8DJ T : +44 (0) 20 7495 5505 E : [email protected] spenceandpartners.co.uk
Authorised and regulated by the Financial Conduct Authority. Registered No. NI37760
