Ensuring Your Pension Plan is fit for purpose 

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Retirement savings vehicles and providers have developed a great deal over the last few years and continue to do so. There are now many types of schemes available-- trust, master trust, and contract-based plans, such as group personal pensions. And providers of each are increasingly offering different levels of support around financial being, broader savings, and effective engagement tools.

Mercer's DC research has found that many employee schemes have not kept pace. By not taking action, employers and their people may be paying too much, missing out on important support, and exposing both to unnecessary risks. And if this applies to you, it is perhaps time to review your plan to ensure it is continuing to meet your objectives. As regulation and complexity grow, governance is increasingly important to pension schemes to ensure they run effectively for the benefit of members. And this principle applies both to trustee boards of trust-based schemes and governance committees used by employers to oversee their group personal pension, or master trust arrangements.

In a rapidly changing world, we recommend that trustee boards and governance committees meet at least every three months to ensure pension schemes are well run and members are supported effectively. And yet, our research shows that 40% don't. If this applies to you, it is perhaps time to consider the importance of pension benefits as a tool for recruitment, retention, and motivation of your people.

And if the answer is yes, it may be time to up the game and engage more effectively with your employee savings vehicles to ensure they remain fit for purpose. Schemes that do hold regular governance meetings should make sure they focus on the right issues. Now, we've seen committees getting bogged down in technical minutiae without regularly reviewing whether their savings vehicle is right for them or their members.

Quite simply, we suggest you challenge every item on the meeting agenda to ensure it's adding value and ask whether there are some things that should be on the list that perhaps aren't. There was a wide range of pension providers with different levels of scale, charges, and service. It is perhaps time to consider what is right for you and your people in 2023.

Now to find out more, contact your usual Mercer DC consultant or email us at dcmot@mercer.com. We look forward to speaking with you.

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