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Pension Funds
Insider

2018: The Year of Deferred

There is a lot of comment in the press about issues that impact the provision of administration services for deferred members of DB schemes.

These range from scams, to the increase in the requests for cash equivalent transfer values (CETVs) and as a consequence, the challenges administrators experience with the transfer process itself.

Looked at separately, each have a potential impact on administration costs, services and our ability to meet member needs.

Looked at altogether it strengthens the argument that 2018 is the year that Trustees should engage with their administrators to develop a strategy for their deferred population.

I am not, for one minute, suggesting that deferred members are any more important than pensioners - of course that is not the case - but they are our future pensioners, our work to be done and often represent a significant proportion of the total scheme membership and liability.

Furthermore we know that the Pensions Regulator (TPR) is renewing the focus on data and, for DB schemes, the deferred population is often where a large proportion of the data issues lie.

This is more than a passing interest, with TPR already having forewarned trustees that they will be asked about quality of data and the extent to which they are looking to improve this on the Scheme Return.

Although we don't yet have all the detail, there is no hiding from the fact that we will all be held to account. Compliance has to be a high priority.

Good data is at the heart of the Pensions Dashboard. And how beneficial will it be for all stakeholders if deferred pensioners engage with their legacy pension savings and administrators do not have to spend so much time (and money) tracking down members who have forgotten about their pension benefits?

Above we have looked at some of the compliance and engagement considerations, but there is a lot of industry 'noise' at the moment about the rise in requests for CETV figures.

This has impacted the majority of administrators and yet, whilst everyone has acknowledged the rise in numbers and we are seeing actions, in the meantime, we still need to manage this work in a way that ensures we do not fall foul of the disclosure regulations.

Conversations need to be broadened to look at how that increase is managed, how processes can be improved (although recognising that there is a role for the industry here) and whether proactive provision of CETV information, either at retirement, annually or online, would be a help or a hindrance.

Practically, administrators are often constrained in their ability to routinely provide CETV information because these are frequently calculated using a standalone modeller provided by the Scheme Actuary.

This makes provision of bulk information either on paper or online a challenge. A way to make this information easier to produce and more readily accessible to members may be a priority for some schemes.

The question of cost cannot be ignored, but nor can the fact that the increase in CETV requests experienced when the Freedom and Choice agenda was introduced has not abated – this is now business as usual for administration providers and it is important we adapt and recognise this.

De-risking initiatives and preparation for the 'end game' are still high on the agenda for many trustees and scheme sponsors.Only individual schemes will know where they have data issues that need to be rectified to support strategic objectives.

Perhaps worth bearing in mind is that these are likely to be the very same data issues that are currently impacting on member servicing and operational efficiency - probably risks that should already be managed.

In many respects I have only covered the tip of the iceberg. In reality we are talking about projects - some of which have the potential to be large and costly - and prioritisation of time and spend will be an important input to any discussions.

Administrators need to make it their new year's resolution (if not before) to be 'front foot', not only asking trustees about their priorities and objectives in relation to their deferred membership, but to be clear about the challenges they face, the benefits that can be realised and how everyone can work together to better meet the needs of all stakeholders.

This, for me, reinforces the message that planning for 2018 is a time to focus on deferred members. This should include evaluation of the potential benefits based on objectives, the risk of not doing something and the output should drive priority.

This should then be assessed against cost to determine the business case.
The administrative challenges of looking after deferred DB members aren't going away – even if we'd like them to. It's time to bite the bullet and make 2018 the year to overcome this challenge for the benefit of all.

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Pension Funds
Insider

Now: Pensions to top up non-taxpayers' pension pots

Non-taxpayers are typically those earning less than £11,000 and they are currently missing out on the tax relief they would receive in a 'relief at source' scheme.

The majority of occupational and trust based schemes operate on a net pay basis, Now: Pensions is the only net pay scheme to offer a top up to its membership.

Troy Clutterbuck, interim CEO of Now: Pensions said: "Net pay offers savers several benefits but, through no fault of their own, non-taxpayers continue to miss out on the government top up they would receive in a relief at source scheme."

"To address this inequality, for a second year, we are putting our hands in our own pockets to top up these members' pension pots."

Now: Pensions says that while the amount these savers are missing out on is relatively small, around £10 per year for somebody earning £11,000, as the nil rate tax band rises this amount is going to increase.

"We continue to talk to the Treasury and HMRC to find a way to resolve this anomaly over the long term, but progress has been disappointingly slow and a solution to this problem remains elusive, Clutterbuck said.

Members of pension schemes who don't pay income tax, are permitted to basic rate tax relief (20%) on pension contributions up to £2,880 a year, which means HMRC will top up a net contribution of £2,880 to a gross £3,600.

However, this tax relief is only available where the pension scheme operates on a relief at source basis – it is not available for schemes that operate a net pay arrangement.

Members of Now: Pensions schemes who do not pay income tax will be able to claim the relief by filling in a claim form so Now: Pensions can liaise directly with HMRC.

First published 14.09.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

Plumbing industry pension scheme secures £560m buy-in

The transaction completed in June 2017 and represents just over 10% of the £5.1bn of bulk annuity business written in the first half of 2017.

The scheme has just under £2bn in total assets and the buy-in reduced the level of risk in its investment strategy, as well as reducing volatility in its funding level.

Alan Pickering, chairman of the trustee said the buy-in was a result of good decisions and hard work.

He said: "The challenges we are facing have been well-chronicled and we are working with the Department of Work and Pensions, The Pensions Regulator, and other stakeholders to find solutions that play fair by all concerned.

Adding that the buy-in is the result of "clear decisions" taken by the trustees, alongside hard work by the executive team, Pickering said employers and members alike will benefit from the increased security the policy brings.

LCP was appointed as an independent specialist buy-in adviser for the transaction.

Clive Wellsteed, head of LCP's de-risking practice and lead adviser to the trustee said there had been significant insurer interest in the transaction.

He said: "We are pleased to have helped the trustee manage the competitive dynamics and achieve such a good result for the scheme."

The transaction included a price lock mechanism that allowed the trustee to lock the buy-in price to the value of the scheme's pooled corporate bonds and then transfer the ownership of these pooled funds to L&G.

Matt Wilmington, director of strategic transactions at L&G said the buy-in demonstrated how the company works effectively with pension schemes.

"Working with our colleagues in LGIM and with the Trustee's adviser, LCP, we were able to transition assets efficiently and generate both cost and time savings," he said.

First published 14.09.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

Emerging market equity most popular asset class with pension schemes

The Investment Considerations Survey, by Camradata, found more than half of those surveyed said they would consider investing in emerging market equity.

Global Equity was the second most popular asset class, while diversified growth funds and corporate bonds were also selected by 40% or more respondents.

For the most recent six-monthly survey participants shared their considerations about investments, asset classes, asset allocation and financial markets for this year.

Camradata managing director, Sean Thompson, said: "While emerging market equity and global equity were selected by most investors, all asset classes are being considered to some extent right now including private equity, private debt, infrastructure, high yield bonds, and Japanese equity and many others."

Top of investment concerns was the low yield environment, which the market continues to experience, followed by the importance of meeting total return objectives – an issue that is high on investors' agendas.

Thompson added: "Investors also appear to be more concerned about protecting capital and economic uncertainty than market volatility.

"The uncertainty around Brexit, Trump's leadership and the challenges of optimising market performance, and balancing risk over return, are also issues that will impact investment decision making."

While Environmental, Social and Governance (ESG) is also a hot topic in the asset management industry, more than half of pension schemes, consultants and investors did not expect asset managers to have integrated ESG into their investment strategy.

"Contrary to the views of investors and consultants, most asset managers have integrated ESG into their investment process," Thompson said.

In terms of interest rate rises over the next year, over 70% of respondents said they didn't expect any changes in the UK or Euro interest rates, whereas 61% believe interest rates in the US will increase by 25bps over the same period.

Thompson concluded, "Most respondents are pretty neutral about the outlook for investments in the US, UK, European and global financial markets over the next year.

"However, there appears to be slightly more optimism in the market especially with the European and global financial markets, but slightly more pessimism with the UK and US markets."

First published 14.09.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

I want holes not power drills

I have a wonderful power drill. It was given to me as a Christmas present a few years ago along with 103 drill bits for use in wood, metal or masonry as required. It's a high trust brand, Bosch, a brand that is enslaved for many other domestic tasks in my house - refrigeration, dishwashing, microwaving and clothes washing.

But for most of the time my Bosch drill-set sits idle, in a cupboard, alongside my spirit level, my electronic measuring device (which I must admit I have never used for anything other than as a fancy laser pointer) and my wire stripper for electrical cables.

Despite its almost perpetual apparent obsolescence I have a power drill. In reality, I don't want a power drill, I never have.

However, from time to time I need a hole.

I'm not really interested in the features of my drill, not its torque, its maximum impact rate, the size of its drill spindle thread, its chuck capacity, nor its lithium ion battery – I just want my hole.

It's the same with pensions, not many people want a pension. For most of their lives pensions are not top of mind. Information on their pension sits in the back of a drawer, or on a pile of things they "must" read or as an unread email in an ever-growing inbox.

They don't know, and in many cases don't want to know, the features of their pension - but they do want their "hole", in this case a retirement lifestyle that is certain and assured.

So why as an industry are we still so fixated on the drill? Surely the overriding purpose of pensions is to deliver good member outcomes, to deliver the "holes" they want and need. Yes, the "drills" must be well built, reliable and quality controlled (governed) so they can deliver to their purpose, the "hole" the member expects.

What can we do to shift our focus to the members' reality? How can we shape our communications to focus on the "hole" and not the "drill"? When are we going to make member marketing and communications capability as much an essential competency around a trustee board table as investment management capability?

Admittedly there is an even bigger picture, many people don't even know they need a hole. But interestingly I have had a greater interest in holes since I have had my drill.

Written by Peter Nicholas,Managing Director & CEO

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Pension Funds
Insider

RPMI Railpen appoints Ortec Finance

Railpen has adopted Ortec Finance's 'performance attribution solution' which will enable the scheme to monitor and improve its investment management process.

The new technology evaluates the impact of all investment decisions the scheme makes, positive or negative, complex or simple, bringing clarity to the investment process.

RPMI Railpen is the trading name of the Railways Pensions Investments Limited, authorised by the Financial Conduct Authority.

Railpen comprises more than 100 sections with complex analytical and reporting requirements.

The company also provides a range of services to pension scheme trustees, such as communications, trustee training, scheme balloting, pensions technical and regulatory services and scheme governance.

Stuart Slater, head of risk and performance at Railpen, said: "We chose Ortec Finance to support us to achieve our mission to pay members' pensions securely, affordably and sustainably."

"To accomplish that goal, we invest the scheme's assets to generate strong investment returns over the long term, so the quality of the analytics and the capabilities of the Pearl system, coupled with its managed service, made Ortec the obvious partner."

Ortec Finance designs, builds, and applies solutions for asset-liability management, ex-ante and ex-post risk management, performance measurement and risk attribution, and goal based financial planning.

Its global client base comprises leaders in the sovereign wealth, pensions, insurance, investment management and private wealth management markets.

Lucas Vermeulen, UK managing director at Ortec, said: "Enhanced insight will enable Railpen to monitor and improve its management process, and provide clients with timely and relevant information about their investment gains and losses - both in absolute terms as well as relative to market and benchmark."

First published 07.09.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

PLSA paper published on good governance

The paper, Good Governance – how to get there: A PLSA discussion paper, emphasises that good pension fund governance depends on the people providing it.

It says that the quality of the input into the governance, will determine the quality of a scheme's governance.

These inputs, the paper says, are mainly to do with the quality of scheme governance bodies and the support they in turn can draw upon.

The paper identified four key characteristics of effective boards or committees – the first being collective knowledge of the technical areas relevant to pension fund administration, on issues including investment, legal and actuarial matters.

The second characteristic is having more general skills, such as an ability to communicate effectively and commercial acumen when dealing with external advisers; and the third is cognitive diversity, through board or committee members with a range of different backgrounds and perspectives.

The PLSA says the fourth key characteristic is to have executive support for the day-today running of the scheme, enabling the governance body to concentrate on key strategic decisions.

On the back of identifying the key characteristics, the PLSA says governance bodies that demonstrate them will make good decisions, increasing the likelihood of good outcomes for scheme members.

In turn, it says, this means The Pensions Regulator (TPR) should concentrate on ensuring individuals who are appointed to boards and committees have the appropriate knowledge and experience.

Joe Dabrowski, head of governance & investment, at the PLSA, said: "Pension schemes are affected by the fortunes of their sponsors and the wider economy, so cannot guarantee success - but governance bodies that are expert, effective and diverse give them the best possible chance of success."

"The regulation of the pensions industry currently is characterised by a focus on outputs and there is a wide range of different regulations setting out expectations of boards and committees, largely concerned with process rather than with ensuring that governance bodies are appropriately skilled."

Research from TPR has shown highly varied standards of governance, with only half of surveyed schemes saying all their trustees meet standards set out in the Trustee Knowledge and Understanding (TKU) Code of Practice, while 24% say they never disagree with external advisors and 58% say they rarely do, suggesting a lack of capacity to challenge advice.

"Regulatory oversight should instead focus on ensuring the right people are appointed to governance positions and let them take decisions in the best interests of their scheme," Dabrowski added.

First published 07.09.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

Worldwide pension fund assets increased in value in 2016

The figures from the world's 300 largest pension funds, show a return to growth year-on-year after a 3.4% decline in 2015, while cumulative growth in assets since 2011 now stands at 23.4%.

The top 20 funds in the research by asset size experienced a higher increase than the overall ranking, growing assets by 7.1% over the period.

Figures also showed that the top 300 pension funds together now represent 43.2% of global pension assets, rising from 42.5% in 2015, as estimated against figures from Willis Towers Watson's Global Pensions Asset study.

Roger Urwin, global head of investment content at Willis Towers Watson, said: "The search for attractively priced assets at acceptable risk continues to be a driving force in shaping the fortunes of pension funds and their ability to meet respective missions and objectives."

"This is increasingly hard and reduces the shine from a year in which the largest asset owners have been able to achieve superior growth in this year's figures."

Urwin added that the ability of leading asset owners to adapt to the changing investment environment, through improvements in governance and the ability to learn from their peers, has been central to the result.

He said: "The desire of asset owners to implement best-practice and sound governance across their organisation has strengthened and will be a key factor in their future success."

According to the research, North American funds have shown the most noticeable annualised growth rate over the last five years, growing by 6.7% during the period.

Funds from Europe and Asia-Pacific regions showed annualised growth rates of 3.1 % and 2.8% respectively.

The US continues to hold its position as the country with the largest share of pension assets across the top 300 funds, representing 38.6% spread across 134 funds.

Meanwhile, Canada has overtaken the UK as the fifth largest country by share of pension fund assets, accounting for 5.4% (5.3% in 2015).

The UK now accounts for 4.8%, falling from 5.4% of total assets in 2015.

First published 07.09.2017

Lindsay.sharman@wilmingotnplc.com

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Pension Funds
Insider

What's next for the war on scammers?

Pension scams are generally unregulated investments offering 'guaranteed returns' that are too good to be true?there's a clue there?the returns quoted are such that individuals will easily make up the amount disinvested today and so will be "no worse off".

The investment opportunities include exotic sounding investments like hotels, vineyards or other overseas ventures. The truth is that these schemes tend to attract very high management fees and often end in bankruptcy, with assets sold on to new owners. This leaves the investor with little or nothing of their original stake.

As well as losing their pension savings, individuals could also get a huge tax bill. The liberation of pension assets before age 55 will very often be classified as an unauthorised payment. Such payments typically attract a 55% tax charge applied to the amount of the unauthorised payment.

If the individual is lucky, this will be levied only on the amount of money paid up front to the individual, but it could be levied on the full transfer of assets.

To add salt to the wound the tax bill will arrive sometime later?giving the blissfully unaware person plenty of time to have spent the money.

In March 2017 alone a record £8 million of pension savings were lost, and now the government finally looks set to do something about it.

There is an estimated 250 million cold calls made each year offering members of the public a free pensions review or incentives to release pension funds early, but the fraudsters don't stop there. They send emails and texts which are just as convincing and dupe innocent people out of their retirement funds.

This blanket ban on all cold calls, texts and emails will send out a clear message to the public that no legitimate organisation will contact them about their pensions, so if they are contacted, they'll know it's a scam. The heavy fines - up to £500,000 - for companies that flout the ban should also reduce the amount of fraud too.

The scammers are very good at what they do and have a very detailed understanding of this narrow area of legislation. The ban on cold calling is the latest jump forward in the ongoing arms race between the pension industry, HMRC and regulators on one side and the scammers on the other side.

In order to solve the underlying problem, the government need to enact into law a system whereby fraudulent advice is identified ahead of the assets being transferred. This is incredibly difficult to achieve and will cause delays to the legitimate movement of funds.

In the meantime, a law which enables Trustees to block payment of a transfer value where there is a suspicion of pension liberation, would enable Trustees to act more decisively.

Trustees have a duty of care towards members and accept this responsibility on a day to day basis. It is difficult for legislation to remove the right of individuals "do something stupid" if they want to. However, certainly for transfers from trust based schemes, trusteeship offers a useful system for members to engage with.

The need for greater legal protection for Trustees and providers taking reasonable steps to protect a member from pension liberation would significantly help in the fight against the scammers.

Robert Palmer, Partner and Actuary at Quantum Advisory

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Pension Funds
Insider

New appointments at LGIM and Now: Pensions

Morten founded Now: Pensions in the UK in 2011 and over the past six years he has played an integral role establishing the company as one of the UK's leading auto enrolment providers with over 1.3 million members and more than 26,000 participating employers.

The Board thanked him for his significant contribution in building NOW: Pensions from the ground up to its current position as a leading provider of pensions in the auto enrolment marketplace.

The chairman of the board of Trustees Nigel Waterson said: "Morten Nilsson has made a huge contribution not only to the success of NOW: Pensions, but to the whole automatic enrolment project in the UK. He leaves an indelible legacy in the UK pensions sector."

Troy has been with NOW: Pensions since August 2016 joining as CFO from Jardine Lloyd Thompson Group where, during a 15-year career with the firm, he held several key roles including CFO UK Employee Benefits and commercial director, Latin America and Canada.

Meanwhile, Legal & General Investment Management (LGIM) has expanded its Active Equity team with the appointment of Nigel Masding as lead manager of the Real Income Builder Fund.

Nigel joins LGIM from Longview Partners, where he was a partner and global equities research analyst, and prior to this, he was a senior equities portfolio manager at HSBC Halbis Capital Management.

Nigel has also held positions at First State Investments and McKinsey & Company.

Designed as an outcome-oriented fund, the L&G Real Income Builder Fund launched in January 2015 for long-term income oriented investors, with a broad applicability across institutional and retail clients.

First published 31.08.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

Finnish fund drops US stocks from portfolio

Varma Mutual Pension Insurance Company, a $53billion (45 billion euro) public pension fund has reduced its exposure to stocks, with most of that reduction coming from US stocks.

Varma CEO Risto Murto told Bloomberg News: "It seems as if there is no president in the UK – if I look at what is the moral and practical power, there is no longer traditional president."

Since entering the White House earlier this year, Trump's presidency has quickly become characterised by Twitter outbursts, including recent defence of white nationalist protestors in Charlottesville.

Murto said Trump's apparent inability to work with Congress is particularly worrying, given the global ramifications of decisions made in Washington.

"The lesson from 2008 is that if we have a problem in the US, then we all have a problem," he said, adding that Trump's response to demonstrations in Charlottesville is a "breaking point if you look at how business leaders reacted."

Murto's comments come as investors grow increasingly uncertain about the U.S.'s future economic prospects.

U.S. stock markets shot up to record highs in the months after Trump's election, as investors bet Trump would cut corporate taxes, boosting bottom lines. But that agenda now appears threatened, and the mood in the market is growing more cautious.

Several prominent analysts in the US have stated that the country's economy is showing signs of a downturn ahead.

Analysts at HSBC, Citigroup and Morgan Stanley recently said that the traditional relationships between stock, bond and commodity markets are beginning to break down, a sign of a market correction ahead.

Trump is due to meet with Finland's President Sauli Niinisto for first time meet in the White House on Monday.

First published 31.08.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
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Pension Funds concerned about executive pay, says PLSA

The PLSA also said that 86% of pensions funds believe executive pay in those companies is too high.

The figures follow the announcement of corporate governance reforms by the Department for Business, Energy & Industrial Strategy.

For the first time, listed companies will have to publish pay ratios between chief executives and the average UK worker.

The package of corporate governance reforms is designed to enhance transparency of big business to shareholders, employees, and the public.

New laws will force all listed companies to reveal to pay ratio between bosses and workers.

The reforms will also include the world's first public register of listed companies where a fifth of investors have objective to executive annual pay packages.

Luke Hildyard, stewardship and corporate governance policy lead, at the Pensions and Lifetime Savings Association, said the announcement should be welcomed.

"For the average chief executive to receive 128 times the average pay of their staff is hard to justify and appears disproportionate in almost any circumstances," he said.

"We are hopeful that today's announcement is a concrete step forward that will see a more measured and transparent approach to executive pay."

The new scheme will be set up in the autumn and overseen by the Investment Association, a trade body that represents UK investment managers.

New laws will be introduced over the coming month that require around 900 listed companies to annually publish and justify the pay ratio between CEOs and their average UK worker; and all companies of significant size to publicly explain how their directors take employees' and shareholders' interests into account.

The reforms come after last year's proposals by the Prime Minister to improve transparency and accountability, giving employees a voice in boardroom.

The PLSA said it would have liked to have seen the government go even further in its efforts towards transparency.

Hildyard said: "We would like to have seen stronger requirements place on companies with regards to their CEO pay policies - requiring a supermajority (75%) rather than a simple majority (50%) means that it would be harder for companies to force through pay proposals despite serious reservations from their most engaged shareholders."

"Workplace pension schemes represent the interests of almost 20 million active members across the UK and invest trillions of pounds into the economy – they are some of the most long-term and engaged shareholders that companies have.

"It is clear that they are extremely uncomfortable with the executive pay culture that has taken hold across corporate Britain with the majority voicing concerns over the pay gap and executive pay in listed companies."

First published 31.08.2017

Lindsay.sharman@wilmingtonplc.com

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Pension Funds
Insider

Developing the digital journey

The arrival of Pension Dashboards in 2019 will have many effects on the pensions industry. If it's successful, and we all hope it is, then member engagement should increase, financial advice costs should fall and outcomes should be improved by members being driven to make more active decisions about their pension.

For administrators, this points to one very predictable outcome – increases in member activity levels, resulting in larger workloads.

As members and advisors engage more with their pensions, then levels of enquiries, illustrations and information gathering will increase, along with actual transactional events such as transfers, fund switches and the exercising decumulation options.

The lesson we have learned from the introduction of pensions freedoms is that we shouldn't think this is going to be a spike or peak of activity that will tail off - hopefully, Pensions Dashboards will lead to a long-term sustained increase in member activity.

It probably seems counterintuitive for a pensions administrator to be welcoming an increase in workloads. But I firmly believe that administration is and should be about protecting and promoting the interests of members, which are best protected when they act to protect and plan for their future. It's the action part that now needs the attention and creativity of the administration market.

A pervasive belief that Dashboards will fill a digital engagement hole for pension schemes is emerging. Comments like "we should wait for the Dashboards to be launched" and "the Dashboards will make member websites obsolete" suggest that trustees and sponsors are misunderstanding the capability and effect this new development will have on members.

Trustees need to understand that the Pension Dashboards will not deliver, replace or negate the need for a broader digital engagement strategy.

In fact, it will do quite the opposite. Pension Dashboards will drive up demand for more digital solutions from scheme members for two reasons:

1. The success of Dashboards should be measured by member action. Viewing pension savings is simply not enough, nor should it be the end of the process. It is the first step in what should be a resulting string of follow-up actions. Action is what we need but the Dashboards don't deliver action, they publish information.

It is direct interaction with providers and schemes where the action takes place. Once a member has viewed their pension savings they will need to contact schemes to take follow-up actions, gather more information or ask further questions. This action is going to drive up activity and the only way to handle that, in a cost-efficient way, is to also start delivering those action stages online.

2. The arrival of pension Dashboards will quite rightly start the member engagement journey online. But where do members go after they have viewed their pension on a website? With many schemes still not providing any type of online engagement, they are going to turn to a manual paper driven system of information exchange.

Slow, expensive and outdated, we run the risk of losing member interest once they've engaged online if we must turn back to manual paper driven processes to get more information directly from their providers. Let's start how we mean to go on and use the arrival of Dashboards to continue to member journey online.

The most referenced reasons for schemes not doing more for their members online is that "it's too expensive and we can't justify it". Online engagement platforms should not be expensive to implement.

Good administrators should be supplying them at little or no cost. If implemented well, they will reduce workloads and operational overheads so why should you be paying your administrator extra to supply them? Do not accept unreasonable costs from your administrator for supplying something that should save them work and improve member outcomes. A good digital offering should be a fundamental part of any administrator's arsenal.

Excuses such as "our members won't use it" are often based on anecdotal evidence or, even worse, based on solutions that are poor, make the registration process too difficult or don't give reason to return to the website. Almost everyone is online, so if pension scheme members are not engaging more with schemes or benefits in this way, then perhaps that's because the available solutions have simply not been good enough.

The advent of Dashboards presents both opportunity and risk for administrators and trustees. The risk is thinking that they're going replace or remove the need for schemes to do more online.

The opportunity is that they will set the tone and channel for how members engage with their pension, which we can capitalise on to reduce the operational burden of a more engaged population.

Trustees and administrators need to start thinking about what members will do after Dashboards go live. As Dashboards help members start planning for a better future, administrators and trustees should be doing the same, by starting to plan for more efficient and productive digital future for their members.

Daniel Taylor,Client Director, Trafalgar House.

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Retiree pension income has halved since financial crash, says Fidelity

The figures reflect the fall in wages, lower market returns, and reduced returns on annuities that pay retirement income, over the last decade.

Fidelity compared figures of two situations - someone retiring today who in 2007 still had 10 years of work and saving ahead of them; and the outcome achieved if that same person had experienced the conditions from the preceding 10-year period, 1997-2007.

The research showed that, on average, people retiring in 2007 earned wages that maintained their buying power, tracking 0.9 percentage points above Consumer Price Inflation (CPI).

Those in 2017 experienced the opposite; with wage growth running at 1.7% against CPI of 2.7% - a full percentage point under inflation, effectively making them poorer.

Consequently, lower earnings mean lower pension contributions with those retiring in 2017 paying in £5,179 less over ten years, Fidelity said.

Ed Monk, associate director at personal investing for Fidelity International said the results made for "grim reading" for the 2017 cohort of retirees – but emphasised that people should remain positive.

"In the period since the crisis the pension freedoms reforms have freed many more people to access their pension pot using drawdown instead of an annuity," he said.

"This comes with greater risk, but at least provides an alternative to being locked into low paying annuities and gives you greater flexibility over how you manage your income.

"For those still with some years to go before they retire, there's a chance to make more of the time available left to save."

"Maximising contributions to take advantage of any employer contributions on offer, as well as the help available from tax relief, makes sense, as does ensuring your pension money is invested to take a level of risk that you're comfortable with, but that will give you a chance of decent growth."

First published 25.08.2017

Lindsay.sharman@wilmingtonplc.com

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New hires at Hymans Robertson and Trafalgar House

Dunster will head the firm's equity research, as senior investment research consultant.

Prior to his appointment, Dunster was head of fund research at C. Hoare & Co, where he worked for six years.

He was included in 2016's PAM Top 40 under 40 and has also held previous roles at Principal Investment Management (now Sanlam Private Wealth) and HSBC Asset Management.

"I'm thrilled to join the expert team at Hymans Robertson especially as we approach such a pivotal time for investment consultancy," he said, "I am looking forward to the challenge of finding the right equity solutions to meet clients' requirements as both the industry and the market backdrop evolve."

Andy Green, chief investment officer at Hymans Robertson, said the organisation was pleased to have someone with Dunster's level of experience on board.

"Tom's expertise in global equity markets will add further breadth to the existing strengths of our practice and help us to continue to build upon the high-quality, independent consulting our clients choose us for," he said.

Meanwhile, pensions administration specialist, Trafalgar House, has also announced further expansion of its team, with the appointment of Peter Laurence as senior pensions associate.

Peter joins Trafalgar House from Willis Towers Watson where he had been Pensions Co-ordinator since 2013.

He brings almost 15 years' experience in pensions administration, having held roles at Capita Employee Benefits, Aspen Actuaries & Pension Consultants and Paymaster. Peter holds the PMI Diploma in Pension Calculations.

Daniel Taylor, client director at Trafalgar House said: "Peter's extensive experience in administration and obvious drive for doing what's right by scheme members make him the perfect fit for Trafalgar House.

"He will add valuable resource to the team, meaning clients can continue to expect a first-class service as the business develops."

First published 24.08.2017

Lindsay.sharman@wilmingtonplc.com

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Government announces new measures to stop pension scammers

The measures will also include a tightening of HMRC rules to stop scammers opening fraudulent pension schemes, and tougher actions to help prevent the transfer of money from occupational pension schemes into fraudulent ones.

Scammers will also be tackled by ensuring that only active companies that produce regular, up-to-date accounts, can register pension schemes.

Limiting transfers of pension pots from one occupational scheme to another will mean trustees must check their receiving scheme is regulated by the Financial Conduct Authority, or has an active employment link with the individual, or is an authorised master trust.

The announcement comes as new figures show almost £5 million was obtained by pension scammers in the first five months of 2017.

It is estimated that £43 million has also been unlawfully obtained by scammers since April 2014, with those targeted having lost an average of nearly £15,000, as scammers try to encourage savers to part with their money with false promises of low-risk, high-return investment opportunities.

Minister for Pensions and Financial Inclusion, Guy Opperman, said the figures highlight the extent to which savings are being targeted.

He said: "People's savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again, which is why we are introducing tough new measures for those who scam."

"If people have saved for a private pension, we want to protect them - this is the biggest lifesaving that individuals normally make over many years of hard work so by tackling scammers, people should know that cold calling, apart from exceptional circumstances, is banned."

The cold calling ban will be enforced by the Information Commissioner's Office (ICO).

James Walsh, policy lead: engagement, EU and regulation, at the Pensions and Lifetime Savings Association (PLSA) said while the measures are a "step in the right direction", the government needs to do even more and to do it quickly.

He said: "People are at risk of losing their pension savings to scammers and we need a clear timetable from government on when it will implement key elements of its proposals - we need more urgency."

The PLSA said it is concerned the measures will need careful implementation to ensure scammers do not abuse them.

First published 24.08.2017

Lindsay.sharman@wilmingtonplc.com

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