Rock-bottom interest rates (for now) and rising inflation rates are creating an even more uncertain future in a sector already beset by much uncertainty.
Pensions and what they represent have become a loaded term for some but, for most, still represent the most efficient and effective way of saving for retirement.
There is still an established industry servicing defined benefit (DB) pension schemes, the vast majority of which are closed to new membership. However, the volume of money now invested in defined contribution, (DC) workplace and individual pensions now accounts for most pension assets worldwide. And, in its turn, is where much of the aforesaid industry is focusing its attention and innovation.
This is the sector in which we work. Much of the commentary you will see makes the stark observation that, unlike DB, DC pension savers are in a different boat – the risk of how much they put away for their retirement rests entirely with them and not their employer.
Up to a point. While DB members are, in the main, due a guaranteed sum for life, there are still steps companies and savers can take to enhance the pension prospects for their workforce and, in so doing, support colleague retention and drive recruitment.
At the risk of stating the obvious, workplace or company schemes also pay into the pension scheme of workers, as does the government in the form of a tax break while saving.
It’s also common for the trustees who manage DB schemes to oversee DC schemes their organisation is likely to have established, meaning they bring their experience and knowledge to bear on behalf of savers in what will be a newer scheme.
And not forgetting The Pensions Regulator, which is urging the pensions industry to do all it can to give DC members an improved chance of a great retirement by encouraging smaller schemes to come together (master trusts are a good example) to stiffen their investment strength and widen the options of where they can allocate their funds.
One area which is helping to foster greater employee involvement in their pensions is a new approach – and emphasis – on starting and continuing the conversation in a timely, accessible and open way, which was not always the case.
In so doing, organisations can kindle greater interest in pensions and employee benefits as a whole by taking a fresh approach in how you talk about them. This is exemplified by our Aspire to Retire employee benefits communication service.
Like much else, there’s much more to what is often described as a straightforward way to save. An employer’s time is best spent running its business. Our consultants can save you time and shape a pension to fit both your employee benefits aspirations and your corporate priorities.