Employees want pensions ‘advice’ from employers

At the first ever National Association of Pension Funds (NAPF) DC PensionsConnection meeting on 17th January 2008, the results of an online poll revealed that 87% of DC experts believed that employees look to their employer to help them understand how much to save and in which funds to invest.

This confirms that the move from defined benefit (DB) to defined contribution (DC) schemes has meant new pressures are being placed on employers especially in terms of ensuring that employee information is communicated and the risks they are exposed to are explained. The key issue is making sure that the information does not constitute regulated advice.

NAPF Chief Executive, Joanne Segars, said: “DC is the fastest growing part of the pensions market and because of this, the associated challenges are increasing just as rapidly.

“Employees do not just want standard information, they want in-depth information, much of which could be bordering on regulated advice. It means the skills of the employer have to be widened especially in being able to judge the difference. It can be a fine line but for the employer, it is a crucial legal and regulatory line.

”The Thoresen review of Generic Financial Advice must put more focus on the workplace to help employers.”

DC PensionsConnection

The on-line poll1, taken by members of the DC PensionsConnection service only, was launched in October 2007.

The new NAPF member service aimed at those involved in the DC pensions world was launched at the same time. Just under 300 people in the DC industry have signed up so far.

The DC PensionsConnection service is free and exclusive to NAPF members and includes a web-site (http://www.napf.co.uk/dcconnection/), newsletter and meetings which provide opportunities to network with other DC experts.

The first meeting was attended by 50 people and was held at the NAPF offices in Westminster.

Ms Segars, added: “We have had a very positive reaction from our members, and we are very pleased with the number already signed up for the service. This is a growing area of importance for the industry and the NAPF is working hard in this area.”