§ New partnership with The Open Market Annuity Service
§ Potential enhancement of up to 40% of members’ retirement income
§ Service bridges the gap between private and corporate market provision
Mercer has added another new component to its Mercer Workplace Savings* solution by offering enhanced annuity terms to scheme members through a partnership with The Open Market Annuity Service.
Using the very latest technology, members will be able to submit medical information online, by phone, or via a tailored questionnaire to identify the most appropriate annuity on the open market based on personal health and lifestyle factors. The difference in retirement income could be up to 40% more than the standard offer from the existing pension provider.
The service will provide added value for clients of Mercer Workplace Savings, which was launched in February this year. Its other market-leading features include advanced technology, robust governance and a range of target-dated funds based on Mercer’s award-winning research.
Alan Whalley, Mercer’s UK CEO, commented: “We have responded to demand from trustees and employers for a service that delivers excellent results to members at a lower cost. We are confident that this new arrangement will make a significant difference, putting the opportunity for enhanced retirement income within reach of all scheme members.”
He added: “Up to now, corporate provision has lagged behind the individual market, where there is often an adviser providing support. We’re now bridging that gap so company schemes can enable all their members to search the market and secure the best deal on offer for their circumstances.”
Mercer believes there will be a significant demand for the service, with up to three million people needing to make decisions about their benefits in the near future as they approach retirement.
Its new enhanced annuity service, which is a non-advisory facility, uses advanced technology to provide accurate personalised information via member reports and tailored websites. It will be supported by advice from Mercer’s Personal Financial Planning & Wealth Management team.
The service takes account of the Pensions Regulator’s best practice guidelines that support members in making more informed decisions about their pensions.
Roger Breeden, Head of Personal Financial Planning & Wealth Management at Mercer, commented: “The general value of annuities for many has deteriorated in recent years, due to lower interest rates and improving life expectancy, but we believe that standard annuity rates will soon become a thing of the past. Increasingly, annuities are being underwritten using postcode-driven and fund size rates, which makes it very challenging for people to get the best deal for their situation.”
He added: “It is crucial that members get the best rate they can as they will be stuck with it for life. As we know, apathy tends to rule and members often select the first option presented to them rather than shopping around. We have now made this process easier, quicker and simpler than ever before.”In addition to its workplace savings clients, Mercer will also be offering the service to members of other group schemes in response to considerable demand from trustees and scheme members.
Graeme Riddoch, Sales & Marketing Directorat The Open Market Annuity Service, commented, “We are delighted to be working with Mercer to deliver this service. They recognise the important benefits of the open market option, and have responded in a way that will make a real difference for many of their clients and employees.” |
