A new benchmark is being launched today by the Pension Quality Mark (PQM) to help companies select a good quality multi-employer pension scheme or master trust.
The Pension Quality Mark READY is a new initiative from PQM, the mark set up by the National Association of Pension Funds (NAPF) to recognise good quality defined contribution (DC) pension schemes that have high standards of governance, communications and contributions.
PQM READY is a benchmark for multi-employer pension schemes or master trusts that meet certain governance and communications standards. It will help employers know that they are choosing a good scheme for auto-enrolment that goes beyond the minimum standard.
To get PQM READY, multi-employer pension schemes and master trusts need to satisfy a set of specific criteria. These include proof that independent trustees are in a majority or have a casting vote, and that member communications are clear, regular and engaging.
Employers using a PQM READY scheme can go one step further and get the PQM for their own company arrangement. To do this, they only need to meet the contributions standard set by PQM as the governance and communications standards are already satisfied. Total contributions need to be at least 10%, with at least 6% from the employer. With PQM, employers can show their employees that they are offering a good pension.
Chris Hitchen, PQM Chairman, said:
“Companies have a responsibility to their staff for picking a good pension scheme under the auto-enrolment reforms. But not all of them understand pensions and they need help. This is why we have launched PQM READY.
“PQM READY is a new way to help employers choose a good quality multi-employer scheme by highlighting those that are well governed, and that have good member communications and low pension charges.
“We are confident that PQM READY will play a strong role in raising the standards among multi-employer pensions and will help deliver good quality pensions to millions of people.”
Steve Webb, Minister for Pensions, said:
“Choosing a pension scheme is an important decision for employers, and initiatives like the Pension Quality Mark can help them with this.
“The new PQM READY benchmark will show employers joining a big multi-employer scheme, and making a decent contribution, that they will be offering a quality pension to their employees.”
Bill Galvin, The Pensions Regulator's Chief Executive, said:
"We welcome PQM READY. Our research tells us that many employers who have never engaged with pensions are concerned about choosing a scheme, and PQM READY can help them with this decision. We're currently in discussions with the industry about how such quality marks could be used to exhibit compliance with our six DC principles."
A multi-employer pension arrangement or a master trust is a scheme that can be used by a number of employers. It is governed by a board of trustees. The launch of PQM READY is backed by all the major multi-employer schemes.
The PQM initiative was launched by the NAPF in September 2009. The mark has been given to 170 pension schemes, and covers a third of a million active scheme members.
PepsiCo, The Guide Dogs for the Blind Association and Severn Trent are the latest schemes to receive PQM. They are joining leading organisations like the BBC, L’Oreal and Michelin that already have the standard. There are two standards, PQM and PQM PLUS.
Under PQM, the scheme’s total contributions must equal at least 10% of an employee’s pensionable salary, with a minimum employer contribution of 6%. Under PQM PLUS, the scheme’s total contributions must equal at least 15%, with a minimum employer contribution of 10%.
Multi-employer pension schemes can find more information on PQM READY at http://www.pensionqualitymark.org.uk/pqmready.php
Notes to editors:
1. For further details on the Pension Quality Mark: http://www.pensionqualitymark.org.uk/
2. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]