Edition 07 July/August 2018 Pensions Aspects WWW.PENSIONS-PMI.ORG.UK Secluded destinations Exploring alternative investment strategies GMP THE RISE FINANCIAL RECONCILIATION OF SELF GUIDANCE THE IMPACT ON SUFFICIENCY AND CLAIMS MEMBERS ACT 2018 Find your next job at www.pensioncareers.co.uk Edition July / August 2018 Edition July / August 2018 Features Acceptable in the 80s 04 Member benefits 06 The road less travelled 12 The rise of self sufficiency 14 Clearer, quicker, tougher 16 GMP Reconciliation, The impact on members 22 DWP’s White Paper 24 The DB to DC transfer debate 26 Financial Guidance and Claims Act 2018 27 Contents Diploma in Regulated Retirement Advice 28 PMI Exams 29 Regulars Editorial 04 Powers to protect pension savers 32 Membership update 08 RPI: the last rites or a rejuvenated measure News from the regions for pension increases? 37 18 Qualifications Taking on the PMI Qualifications 40 19 Events 10 Training 39 Services 41 Appointments 46 Directory Contacts PMI news team HEAD OFFICE MEDIA ENQUIRIES T: 0207 392 7425 E: [email protected] The Pensions Management Institute, Floor 20, Tower 42, 25 Old Broad Street, London EC2N 1HQ EDITORIAL Chris Eyett T: +44 (0)20 7392 7401 E: [email protected] T: +44 (0)20 7247 1452 CORPORATE/DISPLAY ADVERTISING T: +44 (0) 20 7392 7425 E: Malcolm Dunn [email protected] MEMBERSHIP T: +44 (0)20 7392 7410 RECRUITMENT ADVERTISING T: +44 (0)20 8405 6412 E: [email protected] E: [email protected] SERVICES DIRECTORY T:+44 (0)20 8405 6412 E: [email protected] QUALIFICATIONS/TRUSTEES T: +44 (0)20 7392 7400 E: [email protected] DESIGN SJW Branding & Communications T: +44 (0)1732 455555 E: [email protected] COMMERCIAL DEVELOPMENT T: +44 (0)20 7392 7425 PRINT Crossprint Ltd T: +44 (0)1983 524885 E: [email protected] E: [email protected] Published in the UK by The Pensions Management Institute FINANCE T: +44 (0)20 7392 7430 E: [email protected] Available free to PMI members ISSN 2046-7605 WWW.PENSIONS-PMI.ORG.UK PENSIONS ASPECTS / JUL-AUG 2018 03 Acceptable in the 80s Thirty years ago, providing information to members about their accrued rights was a simple matter. In an era where Defined Benefit (DB) coverage was the norm, schemes were required to provide details only under specific circumstances, such as leaving service, the submission of a transfer request or imminent retirement. Then – as now – there was no statutory requirement for DB members to be provided with an annual benefit statement. This was not perceived as a problem, as Another constraint on but the right to withdraw applies there was no incentive for schemes to try promoting member at any time. Crucially with a and improve levels of member engagement. engagement was DC scheme, effective member technological. In an era engagement is absolutely Providing the benefit promise was the before the internet, providing necessary if members are to responsibility of the trustees alone and information for members appreciate the true value of required no active role on the part of the inevitably meant sending out their benefit and ultimately member. Apart from anything else, until paper documents. The costs achieve the goal of a satisfactory 1988, employers could make membership arising from drafting, printing retirement outcome. and posting documents made of the occupational scheme a condition The onus lies with trustees this process laborious and and manager to ensure of employment, and so members were expensive. With little obvious that members properly required to accrue a benefit even (for benefit to the scheme in appreciate the value of whatever reason) they might not have conducting such an exercise, scheme membership. Whilst it was obvious that many did wished to do so. the statutory requirements not bother. to provide an annual Benefit Statement and Statutory Money Today’s environment could By Tim Middleton, Purchase Illustration have not be more difficult. Today’s been in place for many years, a PMI Technical Consultant member is likely to belong to communications revolution has a Defined Contribution (DC) arisen via the internet. arrangement. He or she may have joined as a consequence of Online access to pension auto enrolment; active consent scheme information allows to join may not have been given, members to check – in real time 04 PENSIONS ASPECTS / JUL-AUG 2018 WWW.PENSIONS-PMI.ORG.UK – current fund values. They can new employees into pension make fund switches, review saving, when competition scheme rules and consider Auto enrolment has been one of for scant employee financial transfer and decumulation the great success stories in the resources has been so intense, options. It may be possible to pensions industry in recent years. has been a significant success. model the impact of changes It would be a terrible failure to contribution rates or of if this success were to be bringing forward or deferring compromised by a myopic PwC established that younger financial commitment decumulation. Online approach to the importance members in particular required to improve employee information is extremely of successful member consider the option to manage engagement with pension empowering for members and engagement. pension savings online is saving, there is for many a plays a vital role in promoting particularly important. Failing lack of clarity as to how this member satisfaction. For DC to provide access to a form of might best be achieved. Many schemes, this is a crucially As is always the communication which younger lack an understanding of the important consideration. case with pensions, people consider the norm is associated technology and the a vision for the It is therefore surprising to a serious obstacle to effective benefits it can bring. learn that according to recent member engagement. longer term rather Auto enrolment has been one research as many as a third than a short-term Whilst PwC’s research suggests of the great success stories of employers sponsoring DC fix is absolutely that employers are prepared in the pensions industry in schemes have not provided to make the necessary recent years. Bringing so many necessary. online access to members. WWW.PENSIONS-PMI.ORG.UK PENSIONS ASPECTS / JUL-AUG 2018 05 Member benefits Don’t forget to maximise your membership by making use of the benefits available to you: Designatory Letters Discussion Forums PMI qualified members can use the designatory initials • PMI LinkedIn Group CertPMI, DipPMI, AMPI and FPMI after their names. The PMI LinkedIn group provides members and others involved in pensions and employee benefits to network and share information and News & Publications views. This is a private group so if you would We regularly release news and provide a range of like to join, please email the events team at publications, all of which offer valuable information to [email protected] keep both our members and those affiliated with the • PMI Fellowship Network LinkedIn Group PMI up-to-date with current pensions issues. – Fellow members only • PMI Technical News Fellows of the PMI can book to attend sessions PMI Technical News is our quarterly newsletter through [email protected] which is sent to all our professional pensions and The network provides Fellows with access to trustee members. It addresses, in depth, one discussion material from the Fellowship Network particular topic which is of current interest. meetings and the ability to network. • Pensions Aspects • Mallowstreet Pensions Aspects (formerly PMI News) is our The PMI has teamed up with mallowstreet, monthly magazine which is sent to members. the online community for the pensions and It features technical articles from professionals retirement benefits industry, to enable PMI within the industry; expert/investment insight members to participate in the discussion columns from our Insight Partners; latest news forums, blogs and other activities made from the PMI including qualification updates; available through their website. updates from the industry regulators; updates on consultancy and administration, actuarial and investment, and legal issues; information to To access the mallowstreet forums and blogs, support pension trustees; details on forthcoming PMI members will need to join mallowstreet PMI events, and news from our Regional Groups. (membership is free). 06 PENSIONS ASPECTS / JUL-AUG 2018 WWW.PENSIONS-PMI.ORG.UK > PMI Continuing Professional Development (CPD) Scheme Although the recording of CPD is only compulsory for PMI Associate and Fellow members, the scheme and recording system are open to all. CPD is a key part of your membership Regional Group and by participating in our CPD scheme you will contribute to the development of the profession as a whole. Recording your CPD PMI has a network of 8 Regional Groups throughout demonstrates that you are working to ensure your knowledge the UK. Each Regional Group organises local seminars, and skills are up-to-date. talks and social events. In addition, they provide study support and advice to Students who are preparing themselves for PMI examinations. > Standard Life Investments Educational Portal PMI Qualifications Learning Gateway is a free and convenient way for PMI members to access up-to-date training that is relevant to The PMI is the UK’s leading professional body for your role. It is designed to address the specific training those working in the field of employee benefits requirements of investment professionals, and to help you and retirement savings. It supports and develops to achieve the level of knowledge required to meet your the experts who are responsible for running the investment and career objectives. It is simple to use and UK’s pensions industry and is acknowledged as the flexible enough to fit round your busy schedule for either body for establishing, maintaining and improving gap filling or ongoing training needs.