The Pension Quality Mark (PQM) allows pension schemes to stand out from the crowd, confirming that there is an employer appetite for demonstrating that their schemes are better than the automatic-enrolment minimum, according to new research published today (Thurs).
The PQM Holder Annual Survey, which was launched at the National Association of Pension Funds’ (NAPF) Annual Conference & Exhibition, showed that the vast majority of respondents (70 per cent) agreed PQM is a valuable indicator of good quality for DC pension schemes and gives their scheme a competitive advantage.
There is evidence that schemes are improving and they had changed some element of their scheme to reach PQM standards following auto-enrolment. For example, 18 per cent of respondents said they had changed some element for their scheme within the last 12 months in order to qualify for PQM and more than half agreed that it is a very useful tool when communicating auto-enrolment and any changes to the pension scheme to employees. Most commonly, changes were made to communications (12 per cent), followed by governance (7 per cent). This is a notable increase from last year where 4 per cent improved their communications and 5 per cent improved governance.
These latest results from the benchmarking survey suggests that employers are recognising the importance of good quality pension schemes in the automatic-enrolment environment and are starting to use it as leverage against competitors.
Chris Hitchen, PQM Chairman, said:
“The PQM annual survey shows that the standard continues to be a relevant, trusted and valuable indicator of quality in DC pension schemes.
“Employers make good use of PQM to show that their pension schemes meet independent quality standards and are able to prove that they take their employees’ welfare seriously by qualifying for PQM. Employers are generally well trusted to provide a good pension, but having PQM adds most value to their pension offering and gives an extra level of assurance to scheme members.
“The scheme member is at the heart of the PQM. The mark is driving up standards so that scheme members have better outcomes when they come to retire. So it is pleasing that PQM is helping employees understand and engage with their pension scheme.”
A large proportion of respondents (67 per cent) agreed a combination of good contributions, low charges, regular scheme reviews and clear communications – the fundamentals of PQM - encapsulates what matters most to members for a pension scheme.
Elsewhere, the majority (87 per cent) said that PQM is an important benchmarking and communications tool that allows employers to communicate the quality of their scheme, both internally and externally.
Schemes were asked a number of questions about how they viewed the PQM and what impact it had on their scheme and employee perceptions. The results from this survey will help the PQM Board to decide how it can best continue to promote good outcomes for scheme members.
Since it launched four years ago, the PQM has become a major part of the pensions landscape. There are now 186 schemes, with the PQM, covering more than 300,000 scheme members.
Notes to editors:
1. 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.
2. PQM was launched in September 2009 as a quality mark for DC schemes. Schemes which meet the standards on contributions, governance and communications can become PQM accredited. This gives them the entitlement to use the PQM logo on their scheme communications and branding.
3. This report summarises the findings of the 2013 annual survey of PQM schemes. The fieldwork for this survey was conducted between July and August 2013. 88 out of 180 PQM holders responded to the survey which consisted of 12 questions.
4. PQM Annual Holder Survey 2013 can be viewed .
Dee Sullivan, Head of Media and PR, (interim), 020 7601 1717 or 07917 506 683, [email protected]
Aimee Savage Richards, Press Officer (interim), 020 7601 1718 or 07825 171 446, [email protected]