Employers are improving the standards of their staff pensions thanks to the Pension Quality Mark (PQM), a benchmark which distinguishes good-quality defined contribution (DC) pensions.
Launched by the National Association of Pension Funds (NAPF) in 2009, PQM has been awarded to 157 pension schemes covering around 300,000 active scheme members.
Many employers have improved their already good pension scheme to qualify for PQM. Changes include lowering pension charges or making them clearer; improving communications with scheme members; and strengthening scheme governance.
Among the employers who have raised standards to obtain the Mark are:
- Public services provider Amey, which holds PQM, improved its communications with scheme members. It is also re-launching a website that enables members to run estimates of their pension savings. The site also has case studies to help employees make comparisons with their own situation.
- Market services provider Communisis, which has PQM, reviewed its communications for new members of the pension scheme. The company has created a summary document outlining the main features of the pension, which is used with a more detailed plan booklet. It has also developed an online pension portal for scheme members. Communisis also held a webinar to explain the introduction of five new DC investment funds.
- Miners De Beers UK, which obtained PQM PLUS, improved its procedures and communication to help its scheme members when they reach retirement. De Beers UK also actively encourages members to search the open market for an annuity, and informs them of the tools available. The firm runs presentations for new employees introducing them to the pension, and has improved governance by setting up a DC sub-committee of its trustee board.
- Financial provider Saffron Building Society, which holds PQM, renegotiated the charges for people who stop paying into their pension and secured a better deal for them.
Alexandra Kitching, PQM Manager, said:
“We are delighted to see the strong impact that PQM is having on pensions. We have seen employers raising standards in communications, governance and charges. This shows that employers are increasingly committed to providing good quality pensions to their staff, and are doing their part in tackling the UK’s pensions saving crisis.
“There have been concerns that employers might start ‘levelling down’ the standards of pensions with the introduction of auto-enrolment. But our experience encourages us to believe that this is not likely to happen.”
Valerie Hughes-D’Aeth, Group HR Director for Amey, said:
“Amey is extremely pleased to be awarded the PQM, which recognises our efforts to explain pensions clearly to our people.
“Reward and recognition of staff is a priority for us and we are proud to be part of a scheme that acknowledges best practice in this area.”
Tony Commons, Human Resources Director at the Communisis Group, said:
“As a responsible employer, we applied for PQM as we wanted to demonstrate the value of the pension plan to both current and future employees. The pension plan is one of our key employee benefits and to have it benchmarked in this way confirms that we are providing DC arrangements which compare very favourably with those offered by other major employers in the UK.
“I’m delighted that the Communisis Pension Plan was one of the first to be awarded PQM and that as a result of our commitment to developing and enhancing member communication we continue to maintain the Mark.”
Shola Salako, Pension Manager from De Beers UK, said:
“The application for PQM Plus was made to highlight to employees that the company offers a highly competitive level of pension benefits.
“The application encouraged us to improve our communications to members. Members approaching normal retirement age are actively encouraged to search the open market to find the provider who offers the highest retirement income. Details of the different options available on retirement and the FSA’s annuity comparison tool are also provided.
“The pro-active approach we have taken to communications means members are more engaged. Members increasingly make use of the online facilities to view fund values and investment choices including the retirement planning tools.
“We are pleased that the De Beers UK Pension Scheme – defined contribution section has been accredited with PQM Plus."
Richard Barrett, General Manager People from Saffron Building Society, said:
“Achieving accreditation for our pension scheme was an endorsement of the importance we place on pension provision for our staff.
I was pleased we were recently able to renegotiate the terms of the scheme to achieve a charge reduction for scheme leavers so we could continue to meet the standards required of the PQM.”
PQM distinguishes pension schemes that are well run by employers, whose contribution rates are good, and which are clearly communicated to members of staff.
Merck, BASF and Crest Nicholson are the latest PQM joiners. They join top brands like Volkswagen, L’Oreal and Michelin that already have the standard. There are two standards, PQM and PQM PLUS.
PQM recognises DC pension schemes with good governance and communications, and with a total contribution of 10% (with at least 6%from the employer). PQM PLUS recognises DC schemes with good governance and communications, and with a total contribution of 15%(with at least 10% from the employer).
Notes to editors:
1. For further details on the Pension Quality Mark: http://www.pensionqualitymark.org.uk/
2. Amey is a leading UK public services provider with more than 11,000 staff. The company works across three main markets - Inter Urban, Local Government and Built Environment, which are supported by our award-winning consultancy division. Amey delivers services in the highways, roads, schools, waste, rail, fleet solutions, workspace, street lighting, commercial, housing and aviation sectors. By offering a complete life-cycle solution for services, we maximise efficiencies for our customers.
3. Communisis is a UK leading marketing services provider, specialising in helping customers make their communications processes more profitable. It helps to reduce costs and improve the effectiveness of the whole business process of customer communications. Through its proven experience and scale, it works with clients to transform their customer communications processes by enhancing and deploying customer data; providing technology to automate and streamline workflows; and have world-class production capabilities that can output via print and electronic channels.
4. De Beers UK is part of the De Beer Family Group of Companies. Established in 1888, is the world’s leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds. Together with our joint venture partners, De Beers employs approximately 16,000 people in operations around the world.
5. Saffron Building Society, the largest regional building society serving the East of England, has served the needs of the local community for 163 years and is committed to doing so in the future. A mutual organisation, Saffron Building Society is owned by its 90,000 members and exists solely for their benefit. The Society employs over 120 staff across East Anglia who understand our local customers’ needs, providing genuinely outstanding service, backed up by a product range that offers real value for money.
6. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector. Contacts:
Paul Platt, Head of Media, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]