LONDON 5th May 2015 – There are positive signs of employers and trustees taking the initiative to tackle the changes in pensions flexibilities, and those that have not taken sufficient action are already behind, according to the professional services firm, KPMG.
This follows the results from the 2015 KPMG Pensions for Breakfast Survey, which polled 322 employers and trustees attending Pensions for Breakfast events around the UK in March.
The survey found that overall, 75 per cent of employers and trustees, were planning on providing transfer values as standard as part of the retirement quotation for Defined Benefit (DB) members, and 32 per cent expecting to provide partial DB transfers.
There were also plans for more innovative solutions to address the new flexibilities in pensions for DB members, with 29 per cent planning to offer online modelling tools and 24 per cent providing subsidised or paid-for independent financial advice to DB members.
Only 14 per cent did not have any plans of offering any of the mentioned options.
Stewart Hastie, pensions partner at KPMG explained, “It is encouraging to see that most employers and trustees are waking-up to the fact that they need to respond to the recent changes to pensions flexibility.
“The decisions facing pension scheme members at retirement are irreversible. This shows that employers and trustees have recognised that doing nothing is not a risk-free strategy.”
Interestingly the survey found that the majority of respondents felt that the responsibility for dealing with the impact of the pension legislation change rested with either the employer (31 per cent) or the trustees (34 per cent) rather than individuals, providers or the Government.
Hastie added, “Both employers and trustees must stay on top of the recent changes and ensure they are engaging with their members. We see a need for education, not just the provision of information. By educating members, employers and trustees can help them plan for their retirement based on their individual needs. Members can also benefit from the full range of flexibility options open to them, in turn increasing staff morale and the firm’s reputation.
“Employers can also actively reduce their pension scheme deficit in the long-run by better understanding their members’ individual needs.”
- ENDS -
Notes to Editors:
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
About Pensions for Breakfast
The KPMG Pensions for Breakfast is a bi-annual series of free events, hosted by KPMG across nine locations in the UK. The events aim to educate trustees and sponsors on the latest developments in the pensions industry, as well as create an open forum to discuss key issues, such as the latest changes in flexibility. Events are held in London, Birmingham, East Midlands, Manchester, Leeds, Newcastle, Glasgow, Aberdeen, Reading and Bristol. Pensions for Breakfast has been running since 2011.
More information can be found here.
About the 2015 Pensions for Breakfast survey
The online survey was issued by KPMG on 9th March 2015 to attendees and non-attendees prior to the nine Pensions for Breakfast events around the UK from the 17th to 26th March.
|Trustee / Employee Split
|Primarily, who should be responsible for dealing with the impact of pension legislation change?|
|Trustee %||Employer %||Total %|
|Employer / Sponsor||27%||33%||31%|
|Pension Scheme Trustee||42%||29%||34%|
|For DB members, what do you expect to provide as they approach retirement (tick as many as apply)?|
|Transfer value included as part of retirement quotation||75%||76%||75%|
|Subsidised or paid for IFA advice||18%||28%||24%|
|Online modelling tools||27%||31%||29%|
|None of the above||18%||12%||14%|
|For DC members (trust or corporate, including AVCs) do you expect to provide:|
|No flexibility, members have to transfer out||24%||14%||17%|
|Limited single cash out option||11%||7%||9%
|Limited flexibility from the scheme||20%||28%||25%|
|Full flexibility from the scheme||32%||33%||33%|
|An alternate vehicle to provide members access to the flexibility||13%||18%||16%|
There were 322 respondents in total.
Simon Chan, PR Assistant Manager, KPMG
T: +44 (0) 207 694 2024
M: +44 (0) 7747 564 737
KPMG Press office: +44 (0) 207 694 8773
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|Trustee %||Employer %||Total %|
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.