Having a strong pension scheme governance structure in place reassures you and your members that your scheme is well run, and can help identify and manage any risks to members’ retirement savings, preventing any future problems.
Good member outcomes
One of the key focus points should be helping your people make informed choices and behavioural changes. These can make big differences to peoples’ outcomes at retirement and this is a sometimes overlooked area where a sound governance framework can help.
Helping your members make good decisions
"Good communications and governance both aim to achieve the same thing: better outcomes for members. We are committed to helping your members make the right decisions."
Tania Parmar Consultant
Supporting your broader HR objectives
Beyond the duty of care to your people, good governance makes sound business sense. Ensuring these arrangements are valued by your people, contributing to corporate goals and supporting broader HR objectives should really be a core objective for your business.
"May I thank you for the excellent webinar earlier this week. Pension scheme governance is at last being accepted as an important issue for DC schemes and this point was made well."
Stephen Argent Senior Business Development Manager
Member choices and decisions
The factors that will have the greatest impact on an individual’s retirement fund are determined by the decisions they make; investment, contribution and retirement choices.
If governance is to ensure improved member outcomes then member decisions, as the area with the biggest impact on outcomes, should be considered as part of your governance process.
4 in 10 employees that are eligible for auto-enrolment are "under-saving"
Source - ‘The Department for work and pensions – Dec 2017
Helping you establish a Pension Governance Committee
The best way to ensure effective pension scheme governance and achieve good member outcomes is to establish a Pension Governance Committee – we tend to call it a Pension Advisory Committee (PAC).
Establishing a PAC is a great way for employers to ensure their pension scheme is well run, enabling good member outcomes and that a ‘best practice’ approach is taken whenever possible.
Some typical areas to monitor for an effective Governance process would be:
Suitability of the default fund
Appropriate contribution decisions
Appropriate investment decisions
Efficient and effective administration
Value for money
Appropriate decumulation decisions
Fast-paced, reliable and strong
“We have a good working relationship with Johnson Fleming and are happy with the excellent services provided. The speed of their response is excellent.”
Debbie Goodson Benefits Manager The Economist Group