The full service

Employing a solvency manager could be the solution to trustees’ growing workload, with daily asset allocation reviews and risk component modelling becoming par for the course

DB and tonic, please

With the safety net of the DB model looking ever more flimsy in view of the proposed restructure, some insurers think they have just the dose to combat hasty buyouts

Looking east in earnest

Hong Kong is one of several nations with a mandatory pension savings system in place, so what parallels can be drawn when looking at personal accounts in the UK?

Making a plan for life

Though the reality of retirement does not often match the advertised dream, taking control of the future can make a world of difference

The policy of protection

With the trustees’ role harbouring more risk and responsibility than ever before, the need to cover those liabilities through insurance is paramount

A group effort

While the role of the individual trustee becomes ever more laden with responsibility and liability, the appointment of a corporate trustee is an increasingly attractive option

Looking after the members

With insolvencies on the rise and greater regulation, more trustees are turning to buyout as a solution. But are there any alternatives?

Getting the full benefit

ASPs and income drawdown are alternative options for those who do not want to opt for a traditional annuity. But they don’t come without their limitations, and scheme pension could be an effective way around these

Trying to take it easy

Increasing life expectancy and the more active roles of pensioners mean the right retirement decisions are more important than ever

That’s a wrap

Workplace advice will soon be delivered to employees through platform technology, which should provide benefits to many people

Turning from benefit to burden

Private sector defined benefit pensions are under pressure from factors such as longevity and auto-enrolment. So how will DB need to change to survive?

Beware of the trustee minefield

As increased responsibility leaves trustees feeling the heat, liability insurance products across the board have witnessed a surge in interest

Selection process

Changes to the pensions act have called for an increase in the number of elected trustees. But how can trustee boards take advantage of this scrutiny to get the best from their nominated representatives?

An offer schemes can’t refuse?

Employers burdened with defined benefit pension schemes are increasingly finding innovative ways of reducing liabilities

All hail the pan-European pension

Legislative changes within the EU have increased the workability of pan-European schemes, but do the advantages make it worthwhile?

Getting on the defensive

While most people would accept rules and regulations are a necessary entity, ‘defensive consultancy’ can sometimes be more of a hindrance

Get in on the act

Trustees must have a working knowledge of their scheme’s documents to be in line with the requirements of the pensions act

Safe or sorry?

Are hedge funds a safe bet? Opinion is mixed despite the increasingly frequent view among trustees that they are safe and profitable

A changing landscape

Liability-driven investment looks likely to become a feature of the pensions world, as the rationale for moving away from bonds and towards swaps becomes clearer

Testing their strength

How can trustees of pension schemes judge whether an employer has the financial backup to sustain its scheme?

The challenging weight of risk

Risk-based decisions are increasingly necessary in a complex investment world making risk assessment for pension funds more important but also more complicated

Fine tuned to risk taking

By defining risk and managing it, investors can benefit from risky, skill-based strategies that can be powerful tools for generating returns

That’s a wrap

Wrap platforms are becoming increasingly popular with providers for individuals, but has the time come when they will be rolled out to corporate clients?

Keeping a close eye on the administrators - case study

Administering a defined contribution scheme is likely to involve much closer monitoring and a wider framework than defined benefit

Hitting targets

Trustees must be able to demonstrate that their scheme is well governed, which may require greater resources and more accurate methods of measurement

The changing world

With pensions becoming ever more risk conscious, it seems the future of DC pensions will become predominantly contract-based

Grow something new

Developing a hybrid product for the at-retirement market

The truth about training

Trustee boards are all different, and unfortunately so are their skill levels, knowledge and training

Get protection

Trustee protection and liability insurance is more important than ever before, especially given the way the pensions climate has changed over the last few years

So much to do, so little time

New research has shown DC pension provision is on the increase, with many companies beginning to review and increase their contributions

Give and take

The flexibility of the SSAS comes into its own when investors need to make significant contributions, as it can be used to exceed the annual allowance

Hedge funds give Hermes wings

A £2bn deficit spurred BT’s in-house asset management company to pursue a hedge fund strategy

Hedge funds Q&A
More . . . 

Investment choice and education

DC schemes offer a wealth of fund choices to their members, however, when the majority take the default lifestyle option, maybe that’s where managers should be focusing, says Lesley Carline

More than just a sacrifice

Steve Osbiston discusses the ways in which the new pensions simplification created some great changes to the way employees can get better returns from their benefits

Adaptable voluntary contributions

Although AVCs have their drawbacks, over time they have benefited from better trustee reviews, increased investment choice and more accommodating legislation, says Roy Edie

The responsibilities of government

Jeremy Taylor takes a detailed look at the the government’s pensions white paper, and examines the differing responses from business organisations

Harassed trustees in the spotlight

With more responsibility and less time spent on investment issues, the focus on trustees has never been greater. And the government may not be helping matters, says Terry Mellish

SSAS: opportunity or headache?

Simplification seems to have had the opposite effect on small self-administered schemes. Hamid Nawaz-Khan looks at how the situation has changed since A-day

Managing an ethical exchange

The Co-operative Group is an employer that finds itself in a unique situation since, by its very nature, it has to put the welfare of its employees first. Nick Eyre explains the philosophy

Laying foundations for a DC future

The Pensions Commission has predicted that defined contribution schemes will dominate private sector pensions in the future. Kim Gubler discusses raising the standards of pension administration

Victory for retained part-timers

A House of Lords ruling last month had major implications for part-time workers following a TUPE transfer. Harold Lewis (pictured) and Jason Shaw explain

I’m a trustee, get me out of here!

Pension trustees are a cynical bunch as Ruth Emery found out when she attended a trustee training course

Make sure you’re covered

Trustees and sponsoring employers now appreciate the financial comfort that an appropriately structured insurance policy can provide for those who manage pension schemes. Jonathan Bull reports

Taking sensible steps

Identifying a scheme’s exposure to risks and acting to mitigate these will prevent long-term corporate damage and put the scheme into a much better position, says Andy Briggs

Trustee in training

On a mission to discover what it means to be a trustee during difficult times, Ruth Emery attends a beginner’s training course in search of some answers

Conflict and resolution

Pension schemes must wake up to the potential pitfalls of breaching conflict of interest between company ownership and a place on its scheme’s board of trustees, says Mark Baker

A brave new world?

A-day should herald the arrival of a new, plain and unambiguous world of pension regulations, but the changes will affect us all in very different ways, says Deborah Wilson

Sipps, simplification, regulations and the evolution to A-day

Pádraig Floyd, executive editor, Pensions Management: Flex is a subject that has been much discussed in the last 10 years. Many companies or employers saw it as an expensive way of achieving what they felt they were already doing. However, in the last five years there have been a number of drivers that have changed the way it is perceived. So what do we understand by flex.

Learning from each other

Bradley Belt, executive director of the PBGC, the US equivalent of the UK’s Pension Protection Fund (PPF) talks to Daniel McAllister about the US system and offers some advice on how to make the PPF more effective

D-day for trustees and their advisers

The cosy relationship between trustees and employers who run defined benefit schemes has ended. Trustees are finding out there should never have been one in the first place. Everyone needs to change the way they’ve used actuarial advisers, says Marc Hommel

Think again about bulk buyout

Scheme-specific funding is the latest in a long line of rules re-defining the responsibilities of employers and trustees. Ian Aley reviews some of the investment options that are available to meet their funding requirements

Nicola Cull

1. There are five ways:
   - Research: Finding out how you communicate now and how effective it is.
   - Segmentation: Identifying your audience – and really understanding their needs and motivations. Segmentation should be both logical and practical, but if possible based on factors such as personal situation or attitude.
   - Vision: Define the desired environment and behaviours you want to achieve, from both your perspective and your employees’.
   This will enable you to craft specific and targeted key message.
   - Planning: Effective communication requires a formal process or ongoing plan.
   To keep employees engaged, it should be a continuous cycle of improvement based on feedback.
   - Measurement: Use your research as base-line data to measure the effectiveness of your communications. Listen to feedback and learn from experience.
2. Technology enables much more interactive and immediate communication, for example web casts and online surgeries. It also gives members access to tools that help them make informed decisions, for example online administration allows members to take control of their pension; modellers linked to personal data make pensions ‘real’.
   Watson Wyatt’s own communication research identified nine key elements that make communication effective. Leveraging technology is a key part of good scheme communications, but it should not be seen as a panacea.
   There is no substitute for face-to-face communication. And people still like the security of receiving hard copy that they can keep.
3. Employers should see the act as a golden opportunity to shift employees’ perceptions and beliefs around pensions, and enable them to take responsibility for their retirement savings, rather than viewing it just as another legislative burden.
   The finance act and the pension act combined provide members with much greater flexibility on how they save. Good communication can bring these changes to life and will enable employees to truly take control of their pension.
4. However you decide to communicate, your strategy must include robust feedback mechanisms. That will enable you to adjust the style and content of future communications to meet the needs of employees as they become more pensions aware and their needs change. Building on the data gained in your initial research, you can measure communications in many ways, for example:
   - Surveys – online, paper-based or telephone Focus groups – consider setting up a pensions user group
   - Web polls – a quick and easy way for people to see how they compare with their peers and for employers to obtain simple feedback
   - Dip checks – quick solutions such as mini surveys or telephone surveys can help with short-term assessments to ensure that communications are on track
   - Informal feedback – the quick chat by the coffee machine can provide a wealth of feedback on any current initiative.

Sally Ling

1. The most important point is to establish the objectives of the communication. This could be to encourage new members, to increase awareness, appreciation and understanding of the scheme or to communicate change.
   In all cases, it is essential to identify how you want people to respond and formulate the best possible strategy to achieve that response. The other critical factors are:
   - understand your audience;
   - build upon previous successes and learn from any failures;
   - set a budget at the outset so that best use can be made of existing resources.
2. What is important is the appropriate use of technology for the audience. Allowing members to look up and amend their pension records and model their benefits via the internet or an intranet is an excellent idea, as long as members have suitable computer access.
   Unfortunately, a lot of money has been spent on technology that people do not use. Therefore, it should be used in conjunction with other forms of communication and education.
3. One potential outcome is that pension communications will become increasingly educational as well as informative.
   An ideal way to tackle this is via benefit statements – the only personalised communication members receive and key to improving understanding.
   For those schemes that do not communicate regularly with members, this is a good opportunity to open the channels of communication. There is plenty to be done and it needs to be planned and budgeted for.
4. By asking for feedback. This can be done via focus groups, member research or informally. In addition, where there is a clear objective behind the communication – ie, a specific response is required – the size of this response is the best measure of the effectiveness of the exercise.

Jane Snowden

1. The first, and perhaps most important, element of any communication strategy is an objective analysis of the key audiences and their respective needs. On too many occasions a broad brush, one-size-fits-all approach is adopted.
   It is only once you understand who your audiences are that you can consider how best to deliver the communications message. These days, there are a myriad of traditional print and new media options to choose from.
   Assuming a successful implementation stage, it is then essential to measure the effectiveness of your strategy. Of course, this is not the end of the process but a new beginning as the whole review-produce-measure cycle starts again.
2. Technology is becoming an increasingly important part of any scheme’s communication strategy. It avoids many of the limitations of traditional printed communications. For instance, web-based solutions are easier to update enabling schemes to be proactive and more efficient.
   Some of technology’s own, inherent weaknesses are disappearing over time as broadband usage grows and access widens.
   In considering any communication strategy, it is still important to use a variety of media, especially if any employees would be disadvantaged by a technology-biased approach.
3. No-one who works in the pensions industry is a stranger to change. The latest rounds of legislation from the new pensions and finance acts are just the last in a long list.
   In communications terms, it is not really the legislation but the decisions schemes will need to make to accommodate the changes that will impact on scheme communications.
4. There are many ways in which schemes can measure the effectiveness of their communications. On one side, you can speak to a few members informally through to the other extreme of conducting a company-wide employee survey (be it by post, telephone or online).
   Again, technology can play an important part here too as statistical analysis and reports can be automatically generated.

Mark Rowlands

1. In Axa’s experience every communications strategy will be unique as employers will have different commercial objectives. Their pensions legacy will be unique as will the demographics and requirements of their workforce. So the core elements will be delivered to order based on the objectives and history of the scheme.
   Certain elements are key, for instance it is vital for a successful strategy that the employer devotes sufficient management time and resource to driving the campaign internally. For Axa, understanding the employer’s objectives is most important.
2. This depends on the client. Many solutions are promoted utilising technology but this is often driven by the communications firm or provider having internal cost challenges or resource issues.
   The best schemes utilise a mix of media including technology such as web-based tools and interactive discussions, but many employers and even more employees prefer face-to-face interaction. This is the single most effective communication technique. Talk to the people.
3. There is a raft of regulation hitting employers at the moment. The biggest one for us, is the introduction of age discrimination legislation. Let’s paint a picture of an ageing workforce with poor pension provision, there will no longer be a fixed retirement age. So the employees will not be able to afford to retire.
   For some employers this will reduce their competitiveness over time and will focus the mind of employers in ensuring that the pension scheme is used as a business tool. By communicating on an ongoing basis employers can manage this risk.
4. Employers need to understand the perception that employees have of their pension scheme. Very few employees can tell you how much the employer contributes, whether it is defined benefit or defined contribution, which fund they are invested. Historically this has not happened although some firms are becoming better at this through the use of employee questionnaires and other methods.

Making the right connection with employees and employers

The questions:

A telling time for employers

Laverne Hadaway considers some of the challenges for companies looking to tell their pension scheme members about A-day and the consequent changes to their schemes

The grand scheme of things

Before an employer can begin to communicate the benefits of its pension scheme to employees it must understand clearly the objective of having the scheme in the first place, writes Mark Rowlands

One size does not fit all