For release: Monday 15 October 2012
“Basic financial awareness and making sure employees understand the benefits of auto enrolment is essential if people are to benefit from auto-enrolment” says Morten Nilsson
NOW: Pensions today announces that, as part of its auto-enrolment rollout, they will deliver basic financial education through collaboration with advisory firms.
“Research from the Pensions Institute, sponsored by NOW: Pensions, shows that there’s a real ad- vice gap for employees under auto-enrolment. Auto-enrolment means that employees are passively enrolled and have no choice in their employer’s provider, but the risk that they may not have adequate resources for their retirement lies firmly with them – not the employer. Few employees are truly in a position to make long-term financial decisions without advice and I feel that this initiative goes a long way to closing the advice gap which will exist under auto-enrolment.” explains Imelda Walsh, Trustee Director of NOW: Pensions and former Group HR Director of Sainsbury’s.
Morten Nilsson, CEO of NOW: Pensions says: “Today a huge proportion of the population is completely disenfranchised from any advice. Many people generally don’t save any money unless a solution is presented to them as part of their workplace conditions. So it’s really important that, if they are to fully benefit from auto-enrolment, they have access to at least basic education.
“The logical place to do this, given that schemes will be selected by the employer, is in the workplace. And since many advisers have built their business around member engagement and communication, they are best equipped to do this.”
Under the scheme NOW: Pensions will ask advisory firms to deliver some basic financial education to members when NOW: Pensions is selected by the employer. The adviser will agree the activity involved directly with the employer.
NOW: Pensions will fund this pilot adviser activity and provide:
- a toolbox of material – i.e. a worksite presentation, leaflets and supporting material;
- this will be supplemented by material produced by the advisory firm;
- NOW: Pensions will agree scheme criteria – i.e. minimum size, payment factors.
Morten Nilsson explained: “The adviser is not ‘working for NOW’ – we are agreeing to fund activity that is only available after the provider selection process has been completed. They will remain independent of NOW, but we will educate them in the NOW proposition features. Also the members are not paying for this service. We are funding it out of our communication budget as part of the service we deliver. Our driver is to help employers and employees make better decisions that will ensure they are in a position to be able to build healthy pensions for their retirement.”
Lord John Monks, former General Secretary of TUC and ETUC and Trustee Director of NOW: Pensions, comments: “With my long background at TUC where we’ve been fighting the employees corner, I believe this is a great step forwards for employees.”
Also commenting on this initiative:
Dick Strattan, H&B Head of Development – EMEA at Mercer, says: “Mercer welcomes this innovative initiative which should greatly help employees to grasp the importance of saving for retirement and to decide sensibly between the choices available to them.”
Michael Whitfield, Chief Executive Officer of Thomsons Online Benefits, says: “When I heard about this adviser initiative it reinforced my belief that NOW: Pensions clearly understand the UK pensions market and how to penetrate it. However low the charges on pensions go, and however much employees are bombarded with official notifications about auto enrolment, the fact remains that pensions are a mystery to the majority of people in the UK. Without the right level of education, aimed at the right people in the right way, auto enrolment could well fall well short of its member engagement goals. I therefore welcome this innovative move by NOW: Pensions which we believe will increase the level of pension knowledge and, a result, drive higher take up levels.”
Jon Dixon, Corporate Sales Manager, AWD Chase De Vere, says “Auto-enrolment is a vital initiative that must succeed to secure the financial future of generations to come. The NOW: Pensions
approach is refreshingly different to those of their peers as it supports Financial Education in the Workplace. Financial Education in the Workplace will enable participants to make informed, personal, decisions regarding levels of contributions and retirement expectations rather than them sleepwalking into a Government and Employer driven contribution matrix focussed on compliance with new legal duties rather than the achievement of personal goals. Where NOW: Pensions is the right choice for a business, I believe that NOW: Pension’s initiative will enable members to make the right choices for themselves. The initiative adds a new dynamic to a new world of pension planning and may well deliver the consumer champion needed by the end user.”
James Biggs, Head of Employee Benefits, Lorica, says “Lorica strongly welcomes this initiative. Our whole proposition tackles the daily challenge that employers have in engaging employees on all of their benefits. In a pension market where extra cost burdens are coming in the form of Auto Enrolment and the removal of commission from the providers, it is refreshing that new players in the market are happy to work in partnership with us to continue engaging and educating. To this end, we will happily work in collaboration with NOW: Pensions.”
– Ends –
For further information:
Notes for editors:
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
- Lars Rohde, CEO of ATP Group
- 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, systematically risk managed, cost efficient and high performance 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.
The ATP Group
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 assets amounted to approximately DKK 579 billion (GBP 65bn) and DKK 74 billion (GBP 8.3bn) reserves at 31 December 2011. ATP invests in a wide variety of assets globally. Investment categories are broadly: equities, interest rates, credit, inflation and commodities.