For immediate release: Thursday 19 September 2013
Morten Nilsson, CEO of NOW: Pensions comments on the outcome of the OFT’s Defined Contribution workplace pension market study: “Pensions should do what they say on the tin – provide a lifetime income in retirement that is fair value relative to the contributions paid. Unfortunately, trust in the UK pensions industry’s ability to deliver this has been severely dented over the years.
The success of auto enrolment will depend on the ability of providers to build trust and earn confidence amongst their members. If members don’t trust their provider and they see their hard earned pension pot being eaten up by high charges and their fund performing poorly, the motivation to stay enrolled will be sorely tested.
To help employers select a scheme that is fit for purpose and is going to deliver on its promises to members, we support the OFT’s recommendation that the DWP consults on improving the transparency and comparability of information about the cost and quality of schemes.
The Cass Business School in its Caveat Venditor Report estimates that there are over 205,000 DC schemes in the UK market. This is a ridiculous number and it is unrealistic to expect employers to have the knowledge or ability to sift through these schemes to find the right one for their employees.
Giving employers the ability to easily compare the schemes on offer in the market will go some way to helping steer them through the pensions minefield. It’s important to recognise that some good work has already been done in this area with the establishment of the NAPF’s PQM READY standard. Schemes with the accreditation are recognised as being well governed pension schemes with low charges and good member communications.
More broadly, the growth of master trusts in the industry is addressing many of the concerns raised in the OFT report. Typically, master trusts have lower charges and better governance than traditional contract based schemes although more needs to be done to ensure that master trust standards are protected and maintained.”
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For further information:
Tel: +44 203 640 9075 / 07941 105879
Jennifer Stevens / Victoria Leyton
Tel: +44 207 566 9723 / +44 207 294 3620
Notes for editors:
NOW: Pensions www.nowpensions.com @NowPensions
NOW: Pensions is a multi-employer trust. The investments are managed by NOW: Pensions Investments, a subsidiary of ATP in Denmark, and the administration is carried out by Paymaster, an established UK third party administrator.
The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:
- Nigel Waterson, former Shadow Pensions Minister
- Imelda Walsh, former Group HR Director of Sainsbury’s
- John Monks, member of House of Lords and former General Secretary of ETUC and TUC
- Christopher Daykin, former Government Actuary
- Win Robbins, former Head of European Fixed Income at Barclays Global Investors
NOW: Pensions is committed to developing a better workplace pension provision in the UK by offering a simple, high quality, cost efficient and systematically risk managed pension product that delivers better retirement savings for UK employees. With over 45 years’ experience providing Denmark’s working population with stable and consistent pensions returns, NOW: Pensions is set to transfer the knowledge acquired in Denmark to the UK pension market. Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.
In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.
The ATP Group www.atp.dk
Arbejdsmarkedets Tillaegspension (ATP) / Danish Labour Market Supplementary Pension is a statutory pension fund. It was established as an independent entity in 1964 with the objective of ensuring a greater retirement income for the Danish population. ATP has since developed to become the largest pension fund in Denmark. Together with the tax-financed basic state pension, ATP provides basic income security in old age for the Danish population.
ATP covers almost the entire Danish population representing 4.7 million members and 160,000 employers. In addition to the ATP Scheme, the ATP Group administers a number of pension and social insurance schemes, including several for the Danish state.
The ATP Group total assets under management amounted to DKK 624 billion/approximately GBP 68.4bn (i.e. assets: DKK 540 billion/GBP 62.3 billion + reserves: DKK 84 billion/GBP 9.2bn) at 31 December 2012. ATP invests in a wide variety of assets globally. Investment categories are broadly: equities, interest rates, credit, inflation and commodities.