N E W S R E L E
A S E
Further Pension
Changes Threaten Financial Advice in the Workplace
The Department of Work and Pension (DWP) have recently
announced further changes to workplace pensions which could add further costs
to an employer providing access to financial advice through workplace pension
clinics.
Workplace pensions with auto enrolment are a step
in the right direction and will bring a greater level of pension saving mainly
as a result of employee inertia rather than the identified need to save.
The changes proposed recently include:
·
A charge cap to the default investment under a
qualifying auto enrolment scheme
·
Any pension scheme currently paying a commission
to an adviser for services provider to the employer and its employees will have
to stop
·
A quality benchmark, greater degree of
responsibility on providing a well run pension scheme and being able to
demonstrate it
·
To provide access to at retirement
advice/guidance
Having just reviewed or implemented your scheme to
ensure its compliance with auto enrolment, who is now going to take
responsibility for reviewing your scheme, meets these new quality standards and
who is going to pay for it?
Employee Education
One of the important jobs of any adviser is to be
on hand at pension clinics or on request to deal with employee questions
regarding the pension scheme. To help
employees with the important decisions and advise them on a journey to
retirement.
How well do your employees understand the following
issues?
·
Are they saving enough to meet their retirement needs?
·
Is the chosen investment suitable for them?
·
What happens when their situation changes?
·
What are their options on retirement?
·
What are the tax implications and options?
Why is this important for you?
If an employee is not financially aware
of the decisions they are making how much could this cost an organisation in
relation to;
·
Lost talent?
·
Recruitment costs?
·
Stress for other employees?
·
Reduced production?
Research shows that employers want to develop
“Financial Education” for employees, but how?
In2Matrix believes that this goal is an important
one for employer to achieve. The
education of staff on key financial and employee benefit related issues is not
only important for the recruitment and retention of employees but also for
their ongoing health and productivity.
Consider you own position; would you be less
productive if you had financial stress? Would you be more or less likely to
look for a new job? A financially insecure employee is liable to have more
stress related absence, spend more time dealing with financial issues in the
workplace and have reduced productivity ultimately resulting in the employee
looking for a higher paid job.
The DWP and the Financial Conduct Authority have
put the onus on employees to seek out and receive their own independent
Financial Advice and pay for it themselves (along the lines of an Accountants or
Solicitor). This is great if you can
afford to, However, at £150 an hour of more how many will seek this solution?
The proposal is that “at retirement advice/guidance”
is going to be provided for free? But by who? And at what cost?
We would like to help you assess the impact of the
proposals on your business. As an expert
in providing both generic and specific financial education and advice through a
variety of methods we believe that we can deliver a cost effective quality
solution to even the largest of employers.
Our solution is incorporated as part of a larger
benefit review which is designed to bring potential savings to an employer
which may offset the costs of the education. Bringing this within the budgets
already agreed.
One of our consultants will be happy to discuss our
education solutions and demonstrate the feasibility of incorporating them in
your current benefit package.
Contact Neil Fallon on 020 3638 5152 or email Neil.Fallon@in2matrix.com
