Pension sector facing a ‘capacity crunch’
06 February 2014
New member research1 from the National Association of Pension Funds (NAPF) reveals that 81% of respondents, across both business and pension scheme members2, agree that the volume of change expected by the sector in the next 12 months will adversely affect the level of service they are able to provide.
According to the NAPF’s survey, the abolition of defined benefit ‘contracting out’ was of greatest concern to pension scheme and business members combined (78%), with a particularly high level of concern among pension schemes (85%).
Business members were most worried about the implementation of automatic enrolment with 87% saying they agreed or strongly agreed that it was a cause for concern.
Another area of concern for pensions schemes were the problems posed by the administration of pensions tax relief, about which 77% expressed concern.
Pension liberation requests were of concern to 59% of the survey respondents, with pension schemes more likely to “strongly agree” that this is an area of concern.
Joanne Segars, Chief Executive, NAPF, said: “The pensions sector is facing a ‘capacity crunch’. The NAPF and its members have worked hard to shape and deliver effective reforms that bring positive results for pension savers, but this stack of change threatens our members’ ability to continue to deliver business as usual.
“We welcomed automatic enrolment and our members have led the way with great success despite the challenges it presented. The ambition behind all these various changes is to be applauded, but in attempting to do so much in such a short period of time we risk not delivering the very best outcomes for workers and savers.
“This is too important to rush. We need to press pause, prioritise what really matters and deliver automatic enrolment effectively – making sure we build the very strongest foundation on which to build sustainable and positive change for the future.”
NAPF members were invited to respond to the survey and indicate to what extent they agree, or disagree, that the following areas are cause for concern: implementation of automatic enrolment; the abolition of defined benefit contracting out; pensions tax relief administration; adhering to the new DC code of practice; adhering to the new DB funding code of practice; complying with the new definition of ‘money purchase’ benefits; and dealing with pension liberation requests.
Notes to editors
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.
1 The survey was sent to 7,312 members and was open for response from 17-29 January 2014. 108 respondents completed the survey, split approximately two thirds pension scheme fund members and one third business members.
2 NAPF membership categories
Pension scheme members - pension funds or sponsoring employers providing pensions for their employees.
Business members - businesses providing services to pension funds.
SURVEY HEADLINE RESULTS
|
Pension scheme members - ‘agree’ or ‘strongly agree’ topic is of concern
|
Business members – ‘agree’ or ‘strongly agree’ topic is of concern
|
Average
|
Expect the volume of regulatory change to impact on my / my client’s resource capacity and ability to provide optimum services to scheme members
|
80.3%
|
77.4%
|
80.9%
|
Abolition of defined benefit contracting out
|
85.2%
|
67.7%
|
77.8%
|
Automatic enrolment implementation
|
61.7%
|
87.1%
|
70.1%
|
Pensions tax relief administration
|
76.7%
|
48.4%
|
67.3%
|
Adhering to the new DB code of practice
|
68.8%
|
51.6%
|
61.1%
|
Adhering to the new DC code of practice
|
58.3%
|
74.2%
|
59.0%
|
Complying with the new definition of “money purchase” benefits
|
40.7%
|
54.8%
|
44.4% |
Contacts
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Aimee Savage Richards, Press Officer (interim), NAPF 020 7601 1718 or 07825 171 446, [email protected]