“PSGS offered the right support at very short notice, at reasonable cost, when we really needed it”
“When requesting information by email, I have noticed that there is 'out of hours activity' to answer me. I regard this as a stand out 'above and beyond' - impressed.”
“I would recommend them to anyone - I have dealt with a number of other independent trustee firms and would rate PSGS as the best. We are very happy with Mark and the service we get.”
“I enjoy working with PSGS and we have a very positive relationship. I was new to pensions and found them very helpful.”
“Where PSGS are appointed to act in conjunction with an existing body of trustees, we have found that they are quickly able to fit in well and gain the trust and respect of their co-trustees. ”
“I wanted to look at the effectiveness of our trustee board, so Gillian, our PSGS scheme secretary, provided their trustee self-assessment tool to help me gather thoughts and opinions from others on the board. The tool was extremely easy to use and asked all the right questions to help me collect the information I needed as Trustee Chair. It is a great example of the way PSGS shares knowledge with their clients and makes dealing with key governance issues easy. As well as enabling me to meet one of the Regulator’s 21st century trusteeship requirements, using the tool has flagged trustee training needs and ways we could improve trustee meetings further. ”
Should we be advertising to pension members the ability to transfer benefits from a defined benefit (DB) to a defined contribution (DC) scheme and helping facilitate the process?
According to XPS Pensions, 40% of all DB schemes experienced a significant increase in activity from members looking to take advantage of the new flexibility and 30% of schemes are automating the process. As highlighted at a recent Pensions Management Institute (PMI) meeting, not everyone thinks this is a good thing and it’s a debate that could just keep running.
Yes, we should
At the PMI meeting, the proposal for advertising was put by Steve Webb (Director of Policy and External Communications at Royal London) and Hugh Nolan (President of Society of Pension Professionals). The gist of their argument was:
Freedom and choice has opened up new options and, thanks to low gilt yields, transfer values are three times higher than in 2015. It isn’t surprising that FCA figures show DB to DC transfers doubled in value to £21bn in 2017, with the number increasing by around one third to 92,000 (see this FP Today article).
No, we shouldn’t
Against the proposal was Tim Sharp (Pension Policy Officer at the TUC) and Jeanette Holland (Partner at Baker McKenzie). Whilst they were not both necessarily anti-transfer values, they felt members need to be aware of the risks. Their key points were:
I along with the majority of the PMI audience voted in favour of pension trustees and sponsors not being afraid to advertise DB to DC transfers to members.
Clearly tax on inherited pensions is a big part of the issue and HMRC is looking into this. Another question is whether government should legislate to allow partial transfers - so members can avoid the cliff edge option of transferring all or nothing. Some pension schemes allow this already but it is complex, particularly around contracted-out benefits. Given the focus on other matters like Brexit, Parliamentary time on this is unlikely.
As an independent trustee, I’m keen to see members take proper advice before taking advantage of pension freedoms. It is a major financial decision not to be made lightly.
This is big business for advisers. Many smaller employers have weaker covenants, which can lead to members transferring in the belief the receiving scheme provider has a stronger covenant without understanding all the other risks involved. The FCA is looking into IFA practice around unsuitable transfers and we may see new rules, guidance and a new pension transfer analysis (starting from the basis all transfers are unsuitable) coming into force late this year or early next.
Yes, the ban on cold calling is now to be enacted this Autumn, the FCA and Pensions Regulator provide guidance for members looking to avoid scams and Pension Wise is available to help members understand their defined contribution pension options, but pension trustees need to play their part in helping members make an informed choice too.
Relying on historic standard letters is not good enough. Reviewing your scheme’s communications around transfer options and when transfer values are provided is vital. As is often the way, for pension trustees, communication really is key.