The role of The Committee, set up by Phoenix in April 2015, is to review the value for money (encompassing fees and service levels) that members receive from their Phoenix workplace pension scheme and highlight any concerns they may have on any aspect of what Phoenix is delivering for members.
The Committee has reported that:
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Most of the workplace pension scheme designs operated by Phoenix are working well for their members.
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In terms of customer service and communications, The Committee is satisfied that the culture of Phoenix is one of improving information members experience and of managing expectations of members. It says “We have been impressed with Phoenix’s commitment to customer care”
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The Committee has concerns around the level of ongoing charges that some members are experiencing on pension pots. As a result, Phoenix has proposed an initial action to waive ongoing scheme charges for the next 12 months for schemes where:
- Neither the member nor their employer is paying into the pension pot
- The pension pot size is lower than a certain level (all pension pots of £5,000 or less, but, for some schemes, the limit is £10,000)
- The member is less than age 54. This reflects the fact that the pension rules allow members to access their benefits at age 55 and therefore members who are or are approaching age 55 have the option to take benefits
The Committee believes that the lack of clear information on fees and charges generally throughout financial services is a serious weakness and is therefore calling for greater transparency in the industry to help it to better compare the value on offer. One of
The Committee’s members has joined the industry Transparency Task Force to campaign for greater transparency.
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In terms of how Phoenix addresses below-target investment performance levels, The Committee is comfortable that what Phoenix is delivering is reasonable and in line with what Phoenix has led members to expect.
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Overall The Committee has rated the Value for Money members receive from their pension pots as Amber to Green [1]
In looking at value for money, The Committee has considered:
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Feedback that Phoenix has received from customers
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The standard of customer service and quality of communications provided by Phoenix
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The charges and other costs that apply to members’ pension pots
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Investment performance
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The options that Phoenix offers at retirement
The Committee paid particular attention to three areas:
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How service standards have been met by Phoenix, particularly during times of peak demand, such as when the Government introduced “Pension Freedoms”, giving greater flexibility from April 2015 around how retirement benefits could be taken
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How Phoenix deals with investment performance that is below the targets expected
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The charges that members pay
The report has been written with members in mind and is purposefully short and in plain language. It introduces a red/ amber/ green rating to give members a clear picture of the Committee's findings.
Dr David Hare, Chair of Phoenix’s Independent Governance Committee, said: “The Committee has taken a wide-ranging approach to assessing value for money, looking not just at what charges apply to customer pension pots, but also to what customers are getting in return. We are pleased that Phoenix has responded to our concerns and is temporarily stopping those charges that caused us most concern. We look forward to seeing what longer-term options they are able to offer.”
Andy Moss, Chief Executive, Phoenix Life, said: “The IGC has provided a useful, fully independent review of our workplace pension schemes. We are pleased that our commitment to customer care has been recognised and that most of our workplace pension schemes are working well for their members. We look forward to continuing our work with the IGC on developing longer-term solutions to improve value for money”.
During the remainder of 2016, the IGC’s will build on the knowledge gained it is first year and specifically:
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Continue to monitor the value for money you receive on your workplace pensions
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Dig deeper into a number of areas, building on our initial investigations in 2015
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Monitor closely the work that Phoenix does to develop longer-term solutions to improve value for money
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