Date Posted: May 19th, 2015
Pension reform
A new opportunity for employers
The Government’s new pension reforms are already driving many of the UK’s leading organisations to review the pension schemes they offer to staff. Larger organisations – typically those with over 1,000 employees – have a great opportunity to use this as a proactive platform for change.
This is positive news. If the pension changes stimulate better decision making and superior outcomes for both employers and employees, it will be a win-win for all.
Those companies that are quick to adapt to the new flexibilities will undoubtedly be in a stronger position to retain top talent, while simultaneously reducing risk and enhancing their reputation.
For employees, greater visibility, flexibility and control over their pensions will help them plan for a better retirement.
Pension governance – a growing burden
Trust-based UK defined contribution (DC) schemes must now follow the six principles for good workplace pensions and the 31 quality features contained in the Code of Practice and Regulatory Guidance. Meanwhile, other initiatives such as automatic enrolment mean the number of pension members in company schemes is set to grow rapidly. And the innovation doesn’t end there – ‘pot follows member’ and the charge cap will continue to add to the complexity and cost of running trust-based schemes.
With defined contribution plans aligning the best interests of employees and employers can be a balancing act. A company should consider whether their DC plan is adding value to the business and if those responsible for looking after the scheme and retirement savings of your employees are the best qualified.
It is against this background that we have decided to launch our new UK master trust, called LifeSight. LifeSight joins our growing family of master trusts operating in Belgium, South Africa and Germany.
So what is LifeSight and how can it help you?
LifeSight is our new independently managed and fully outsourced DC pension solution for the UK market.
It is a multi-employer pension master trust for employers who want to benefit from high-quality, lower risk, competitive pension provision – without the governance burden.
LifeSight features all the main characteristics expected of a master trust. Each employer has its own segment with the wider arrangement, and member communications can be co-branded as required for each employer.
LifeSight is governed by a single independent trustee board made up of professional, experienced individuals. This governance structure alleviates some of the demands of such a scheme that would otherwise fall on the employer, whilst giving you confidence that a highly qualified board and advisors are working in the best interests of your employees. LifeSight also gives your organisation the potential to benefit from economies of scale, thanks to consolidated governance and bulk purchasing powers which enable us to offer such a competitive proposition.
LifeSight’s proposition
So how does LifeSight deliver value to you?
LifeSight provides a great user experience, thanks to our market-leading technology and engaging approach to employee communications. Members can improve their retirement journey and outcomes using our personalised, intuitive support tools that work seamlessly on laptops, desktops and tablets and even via smartphones using our App.
Employees will still be able to identify you as the provider of the pension element of reward, as company branding can be overlaid on to all LifeSight member communications. Further integration with flexible benefits platforms is also possible.
Our flexible approach when it comes to transitioning to LifeSight allows you to transform your pension provision with minimal disruption to your existing structure and the user experience. At the same time, your members can benefit from the recently introduced flexibilities from the recent pension reforms when drawing their pension savings.
We and LifeSight trustees will continue a dialogue with each employer within LifeSIght and provide regular communication and management information. This will ensure that as LifeSight evolves, it continues to meet the needs of you and your employees.
I do hope you are as excited about LifeSight as we are here at Towers Watson.
I encourage you to explore the site to find out more about our new master trust and how it can work for you. We have also published a new report into the public’s attitude to pension reform.
We welcome your questions and feedback. If you would like to get in touch or would like more information, please contact us.
