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Recommending the right pension scheme

This article is part of
Guide to Auto-Enrolment

3) What are your investment options? What type of funds does the scheme invest in? Do they provide a rigid lifestyling approach or flexibly managed Target Date funds? Who designed the default strategy and who manages it day-to-day? What other self-select options are there that members might want to access – such as risk profiled funds, ethical or Sharia funds?

4) Who is managing the investments? Do you know where your money is being invested? Do you know who is managing these funds? Do you have access to information about the funds and their performance data? What risk control measures are there in place? How has the investment strategy adapted to consider the new pension freedoms?

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5) Are you getting value for money? As a member, what are you getting in return for the fee charged to members? Is the scheme targeting high quality or low cost?

6) Who is your pension provider? What do you know about your pension provider? Are they using old or new systems? Are they selective about what schemes they accept or are they guaranteed acceptance? Who are the trustees responsible for the scheme (if a master trust)? Who is on the Independent Governance Committee of a contract-based provider? Where are the funds held? Who are the fund managers? Who is responsible for looking after your money and are they investing it wisely?

7) Who is providing compliant communications? Setting up a pension scheme is only the first step in the auto-enrolment journey. Going forward employers are responsible for ensuring they assess and communicate with their workforce going forward. They can do this in house, their payroll provider might do it for them, they might be using a middle ware provider, or their pension scheme could be offering this service. They need to know who is doing it, and cannot assume that it is automatically being taken care of by someone else.

In terms of what corporate clients value, research Now:Pensions conducted with 248 advisers earlier this year revealed ‘guaranteed acceptance’ was the most important factor for advisers when considering an appropriate scheme.

Guaranteed acceptance is where a provider will accept all legal applications for clients of its partnered payroll bureaux, therefore there is no uncertainty and no waiting, Now:Pensions said. It added that schemes are available within as little as two working days of submitting an application.

The research also showed that 29 per cent of advisers cited the level of charges as important, followed by the default fund quality at 16 per cent.