ThePensions Regulator and the Financial Services Authority said in a joint announcement that the new publication, “Guide for employers: talking to your employees about pensions,” is intended to help sponsors make sure employees are getting the maximum pension benefit. Starting in 2012, all U.K. employers will have to enroll their employees into a pension plan and fund that plan.
The leaflet sets out questions that employers may
be asked by their employees about pensions and suggests
answers and other sources of information that employees
can refer to. The announcement said it will be relevant
to employers with DB, DC, and contract-based schemes.
class=”Pa7″> “The main purpose of this guide is to highlight that there is a lot you can do to help your employees make decisions about their pension and that this help can benefit you and your employees,” the regulators wrote in the new booklet. “In difficult economic times, pensions are not always the main thing on everyone’s mind. This guide focuses on things you may want to do voluntarily, often at little or no cost, to help improve the value that you and your employees get from your pension scheme.”
class=”Pa7″> For example, the booklet said sponsors can pass along to participants:
- how they can join;
- how much it will cost them;
- how much the employer will pay towards it; and
- what benefits the scheme provides.
The regulators also urged caution when communicating
financial advice. “You normally need to be authorized
by the FSA to give professional financial advice on
investments, including personal and stakeholder pension
schemes,” the booklet said. “So you should avoid
giving financial advice and focus instead on giving the
facts and generally promoting the scheme.”
Said David Norgrove, pensions regulator chair: “We expect that employees will approach their employers for information and support – as we know employees consider their employers to be a trustworthy source of information about pensions. Our aim is to help employers build confidence in talking about pensions – without worrying about breaching rules on financial advice.”
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