The ACA found strong support from employers for TPR’s proposed two-track compliance process for funding defined benefit schemes and half of the respondents support the introduction of new Collective Defined Contribution schemes, as is being proposed for Royal Mail. Employers support the pension dashboard but 82% do nt want to see multiple pension dashboards (or dashboards which don’t include State pension benefits) and less than half have got their data ready. More employers are helping employees to understand their retirement spending needs, but the majority don’t offer access to independent advice.
A separate report in this series will address employers’ responses to climate change (another important area of reform in the Pension Schemes Bill).
Key views of employers in the report are:
TPR’s DB Funding Code Consultation
• 72% support the Fast Track and Bespoke compliance proposals, but a quarter oppose TPR’s overall direction of travel
Collective Defined Contribution (CDC)
• 52% support CDC being made available to employers other than Royal Mail, with 12% of employers considering using such a scheme. Half support a CDC Master Trust option
• 58% think CDC will be hard to communicate to employees
Pension Dashboard
• 82% oppose multiple dashboards and dashboards that do not include State Pensions
• Less than half have cleaned their data in readiness for a pension dashboard
Independent Advice
• 45% provide access to independent financial advice to employees close to retirement
• 39% say members are experiencing difficulty in finding advice on DB transfers
DB Consolidation
• 65% say consolidation is a ‘good thing’ compared to just 39% a year ago
• A majority say it would be more likely if benefits could be simplified too
Commenting on the findings, ACA Chair Patrick Bloomfield said: “The Government and TPR should be encouraged by the broad support for the new DB Funding Code. But with 1 in 4 employers being against the direction of travel, work is needed to resolve the challenges for schemes still open to new members and making the new framework fit for a post-Covid world.”
“Whilst there is strong support for the pension dashboard, there are warning signs about what is expected and when. The pension dashboard has the potential to help employees understand their pensions, which is really important, given that most employers don’t provide their employees with access to financial advice. Curiously, the Commons recently voted down making it compulsory to direct employees to Pensions Wise, which flies in the face of what the public needs.”
Also commenting on the findings, Peter Williams, Chair of the ACA Pension Schemes Committee said: “The growth in support for the CDC option being offered is encouraging, although it’s important that this advances over time to suit other CDC designs, given they may differ from what is being proposed by Royal Mail. The regulations must also open up to support multi-employer CDC schemes, and there is welcomed support for Master Trust CDC solutions.
“The quite rapid advance in support of DB consolidation probably reflects mounting concerns at some employers over the future in both economic and regulatory terms. It’s a shame the Pension Schemes Bill did not incorporate consolidation measures to back up the recent guidance from the Regulator but we are encouraged by the suggestion that another Pensions Bill will take this forward in the near future.”
ACA 2020 Survey (Report 2)
|
