We broadcast our annual Employer Forum online on 26 November (the event was actually filmed on 18 November). We shared our review of 2020, including a detailed look at our investment performance, as well as plans for our programme of continued technical and service improvements, and our campaign work on the small pots taskforce and the gender pensions gap.
The forum was also your opportunity to put your questions to our executive team. You can see their answers below.
• Rob Booth – Director of Investment and Product Development
• Ralph Frank – Chief Operating Officer
• Gavin Horwood – Director of Relationship Management
• John Kidd – Chief Technology Officer
• Patrick Luthi – Chief Executive Officer
• Eleanor Levy – Director of Marketing and Communications
• Joanne Segars OBE – Chair of Trustees
If you weren’t able to join us, or you want to see a recap, you can watch the full video (49 minutes). Watch the NOW: Pensions Employer Forum 2020. You can also let us know what you thought about the event.
Q. Patrick, what’s a typical day like for you?
A. The great thing about working at NOW: Pensions is that there isn’t a ‘typical’ day. My days have changed a lot since the lockdown – I’ve gained a few hours as I’m not having to commute to the office, however, my workday has become longer! I spend much of my time speaking on Teams or Zoom and pleased to have been able to spend time with various government officials to explain our position on the ‘small pot’ challenge and the charge cap review.
I’m also working hard to ensure that our new recruits, who haven’t managed to visit any of our offices yet, are getting fully integrated into the business. One of my key concerns has been on looking after the safety and wellbeing of my staff – liaising with HR and our mental health officers to ensure they’re fully supported to help our staff through this difficult period.
I believe that keeping active is good for a healthy mind and body so I’ll often go on runs over a lunchtime to ensure I’m keeping fit and healthy. Keeping a healthy work-life balance is so important for mental wellbeing.
Q. Please introduce a range for funds for employees to choose from. The current investment process is completely opaque and doesn’t allow employees to choose the level of risk they are comfortable with.
A. Rob: This is question which we often ask ourselves, but one which is rarely asked by our members. At the moment, we don’t have any immediate plans to introduce fund choice and there are three main reasons for that:
a) We still believe that choice is something that often works against members. We’re all creatures of habit, and we can’t help our emotions clouding our judgement when it comes to making financial decisions. We’ve seen evidence of members buying high and selling low, i.e. jumping into high-growth funds at the top of a cycle, and jumping out at the bottom, and the current volatility in markets is likely to have exaggerated that behaviour. That can have a huge negative impact on their retirement savings.
b) We’ve looked at the behaviour of members among our peers. NEST and People’s Pension offer choice and less than 1% of members make use of that choice, but all their members are paying for those options to be available.
c) The trustee board takes full responsibility for the fund, and the trustees are able to focus all their attention on just one fund, rather than dilute their focus over several. On that front, we’re currently finalising a strategic investment review that will see further improvements made to the way we invest our members’ money. I take on board your comments about our investment process being opaque and you’ll be pleased to hear that helping members to understand how we manage their money is a central tenet of the trustees’ objectives for this review – so watch this space.
As I said we don’t have any immediate plans to introduce investment choice, but it’s worth mentioning again that this is a decision which we revisit regularly. We’ll continue to monitor member behaviour among our peers as funds grow, and we’ll always take into account feedback from our own members and their employers before we reach any conclusions.
Q. What action is NOW: Pensions going to take to reduce global warming? Will you reduce or remove investment in fossil fuels etc?
A. Rob: We covered some of the steps we’re taking within the investment section of the presentation. We take our responsibility towards the environment extremely seriously and we’re taking active steps to reduce any investment exposure we might have to fossil fuels. As mentioned, we’re also increasing our existing £200 million investment into green bonds which provide finance for climate-related and environmental projects. We’ll be sharing more on the positive steps we’re taking to invest for a better world in the early part of 2021.
Q. Why does it take so long after the payment has been taken on Direct Debit by NOW: Pensions for contributions to credit individual employees’ ‘pots’?
A. Ralph: Investment takes place on a Wednesday each week, with all contributions received between the Tuesday of the week before and the Monday of that week being invested. There’s a one-day reconciliation period after the contribution has been received that causes the contributions received on the Tuesday in the week before to miss investment on the Wednesday of the week in which the contribution was received.
Our administrator provides an update on the Friday after the Wednesday on which the funds were invested to confirm that investment has taken place. This confirmation is then uploaded into our systems and the updated value is reflected from the following Monday.
We appreciate that the ‘credit’ process appears slow, but monies are actually invested faster than is reflected, that is, on the Wednesday rather than the following Monday.
Q. How are my pension contributions affected on statutory maternity pay?
A. Ellie: If you decide to take parental leave (maternity leave, paternity leave or adoption leave), you should remain a member of your workplace pension, and you and/or your employer will continue to make contributions, unless you decide to stop contributing.
If you do stop contributing, your employer will also stop their contributions and you’ll be treated as having left the Scheme. Your employer’s contributions are based on your pensionable earnings before you started the parental leave, while your contributions are based on your actual earnings during the parental leave. If your employer matches your contributions, they must continue to match the same level of contributions that you were paying before the parental leave started.
Q. Why can’t this system link in with my payroll? I’m using Sage accountancy software.
A. Gavin: We’re currently working with Sage to create an Application Programming Interface (API), a software solution that will allow our systems to link with Sage, so you don’t need to manually import a pension data file into Gateway.
Q. My director is the only one on the payroll. He doesn’t have a pension but wants to join NOW: Pensions. Can he do this?
A. Gavin: To join the scheme, we’ll need to include his details in the Pension Import File which you can generate from your payroll software. Once this has been produced, you’ll need to import the file by logging into your employer Gateway website. We’ll have given you details and instructions on how to access this when you set up your Scheme. If you’d like to provide your details, we can arrange for one of our Relationship Managers get in touch and help you through the process.
Q. My payroll is Equator and every month the CSV is dated the sixth of the month and your system rejects it as it will only accept the first. I understand from the software company that you should be set up to accept this date under the guidelines – is there to be any modification to accept it?
A. Gavin: This should be easily rectified by amending the payroll schedule which is created in Gateway, so it uses the sixth of the month as the start of the pay period. If you’d like to provide your details, we can arrange for one of our Relationship Managers to get in touch and help you make the necessary changes.
Q. Due to current COVID-19 restrictions, the job centre is not currently booking an appointment to issue National Insurance numbers. We have an employee who is waiting for an interview for the fifth month now, so I’ve been submitting her pension contribution with missing NI. I understand that this can only be done for a maximum of six months. Is there a concession for this given the current circumstances?
A. Gavin: The National Insurance number is an important and unique way to help identify individuals and we ask our clients to supply this as soon as it’s practical to do so. However, we do appreciate that, in certain circumstances, it’s not always possible to do this within six months. The validation process in Gateway flags this as a warning if no National Insurance number has been supplied within six months of enrolment, but it won’t stop the import process.