Jonathan Parker Director DC and Financial Wellbeing at Redington, explains why gaining PQM status was a sensible move for the company
Redington undertook a full review of its workplace benefits in 2018, and as part of the process asked its staff what type of savings products they would like to see made available. With a young workforce, there was recognition of the benefits of long-term savings through a pension, but also that different ways of saving would help address other shorter-term needs that they had. Based on this feedback, the project team, with strong buy-in from the board, agreed the following set of objectives:
- Maintain the workplace pension as the core savings vehicle and ensure it meet best practice standards
- Make available other savings products to employees via payroll deduction
- Put in place a market-leading contribution structure
- Make full use of Redington’s investment ideas within the default option
- Establish a governance committee to oversee the ongoing management of the pension.
The clear steer from the board to ensure that the workplace pension adhered to best practice standards led the project team to Pension Quality Mark (PQM). The rigour with which the PQM standards had been put together meant it was the obvious choice to use as the benchmark against which the new workplace pension should be measured. It remains the leading external accreditation for workplace pensions and would demonstrate to employees the quality of the new arrangements as well as Redington’s commitment to maintaining high standards in the future.
The PQM application process itself served as a useful way of testing whether the structure that had been implemented and the governance committee’s terms of reference were fit for purpose. The PQM team were incredibly supportive throughout the process and fed back useful ways in which the pension scheme and structure could be improved. For example, with a young workforce and no-one yet within five years of retirement, Redington has yet to put in place an engagement approach with employees to support them as they start to think about how they might use their pension benefits when they stop working. Also, despite Redington being in the pensions business, we have a workforce in varied roles, many of whom would not consider themselves to be experts. This means that the communications strategy must be flexible enough and written in appropriate language to appeal to people from lots of different backgrounds. Finally, the governance committee is made up of employees that represent the whole of Redington’s business, not just those with a strong pensions background. This means that from a skills perspective, we have had to consider the whole spectrum of DC knowledge and make sure all committee members’ needs are addressed.
This feedback from the PQM team and the Standards Committee has enabled us to focus the governance committee’s time on those areas where the Redington scheme can be further improved. With the launch of the Retirement Living Standards, there is now a package of measures from the PLSA that can be used to really drive good retirement outcomes for members of DC schemes.
Redington and the governance committee are already starting the early planning for the three year review of the pension scheme, default option and contribution structure. As part of this process, the committee will be considering whether PQM Plus accreditation is an appropriate next step to strive for, and how it can work more closely with the workplace provider, Aviva, in supporting members whatever stage of their working lives they might be at.