The government officials said their suggestions for “employer engagement” in plan administration are for group personal pensions (GPP) that typically feature an individual contract between the provider and the member with no routine contact between the employer and the provider.The latest guidance includes specific suggestions not only on how employers can get more involved in their plans, but how they can more effectively work withadvisers, employer representatives, employees, management committees, and trustees.
“Employers who establish a governance arrangement do so for a variety of reasons, often to do with how the scheme is working in practice at employer level,” the regulators wrote. “The purpose of the governance arrangement and the employer engagement activities is not to do the job of the regulators, but rather to complement what they do. “
The agency employer engagement can:
- lead to a better plan, which would help avoid the risk that a plan is thought of as being poorly run – making it harder to attract and retain key talent,
- save time and money by preventing problems that could be costly to fix,
- improve member understanding of, and confidence in, the pension offered, and improve take-up and appreciation of the pension scheme by members,
- help prevent future problems such as eventual employee protests against only having poorly performing investment options from which to choose, and
- help participants have a more effective voice in the plan’s administration.
“Many employers have already put in place voluntary governance arrangements as they see them as beneficial for both themselves and members,” Chief Executive Tony Hobman said in a news release.
The new guidance is here .