B&CE, the UK’s largest workplace pension scheme provider and the organisation behind The People’s Pension is inviting other pension providers to support them in their call for the provision of a Central Pensions' Registry (CPR), in a bid to overcome the growing issues and problems associated with small pension pots and portability.
The discussions around small pots and portability have been gathering pace over the last year and particularly over the last couple of weeks. B&CE, with its first-hand experience of providing pension schemes to the types of workers that auto-enrolment is targeting, is only too aware of the size and scale of the issue the industry is facing. All the solutions proposed so far have some merit and need consideration, however all of them will face complex industry and regulatory issues, which will take a number of years for an effective and fair process to work. B&CE believes the setting up of a Central Pensions' Registry is a logical first step that should be taken regardless of the eventual chosen solution.
B&CE is proposing a three-stage solution that will not only benefit consumers but providers and regulators in a cost effective and efficient way.
1. Establishing a central pensions' registry (CPR)
The foundation of the plan is the establishment of a centralised and standardised register of all individual pension memberships in the UK. All consumers would have access to this database which would provide a summary of their accumulated pension provision to date and in one, standardized format, such that they will be better informed to make pension funding related decisions. It is recommended that the register will be held by DWP or TPR.
2. The introduction of combined pension statement and selective auto-transfer
Giving consumers access to how much they will receive in retirement to ensure they are saving sufficiently. For this to work, providers would have to send electronic data to the CPR which would then be compiled and amalgamated into one statement. Requests for a pension fund consolidation illustration would trigger a fully or part automated response direct from the provider.
3. Extending consumer choice
Ultimately, it should be possible to allow consumers to make an informed choice of where their money goes, rather than their employer, which will give the employee greater control over the levels of charges they are paying, the investment returns, product flexibility, etc. This has the potential to be a reality with the CPR in place and it is easy to see how the approach could be adapted to follow the Australian model in that employee contributions are processed through a central clearing house and from there on to a designated provider.
Commenting on the initiative, Jamie Fiveash, Director of Customer Solutions at B&CE commented: “We have been lobbying for years for a solution to the automatic transfer of small pots and believe a ‘Pot for Life’ is the right of every consumer. The formation of a CPR will provide accurate access to all pension entitlement forecasts including State entitlements in one place and will go a long way to resolving this ongoing and growing issue.”
B&CE is proposing the CPR would be funded by scheme providers in the form of a levy and would replace the current tracing system that is used. Once the CPR is fully in place, B&CE estimates combined pension statements could be a reality within 2 years.
To request a copy of B&CE's proposal, please contact Jo Gibbs at B&CE via email: jogibbs@bandce.co.uk
Note to editors:
About B&CE and The People’s Pension
The People's Pension, from B&CE is a hassle-free, flexible and portable workplace pension designed for people, not profit and is suitable for any organisation, large or small, in any sector.
For the past 30 years, B&CE has been providing workplace pensions to employers with low to moderate earning workforces of as many as several thousand employees to workforces of just two. B&CE has been operating a form of auto-enrolment for ten years through its EasyBuild product and in November 2011 announced the details of The People's Pension, which will be open for business in Spring 2012.
B&CE, a not-for-profit organisation, has provided financial welfare benefits to those working within the construction industry and their dependents since 1942. Today it manages assets of over £1.8 billion and provides financial benefits to more than 205,000 operatives on behalf of over 6,300 construction employers.
The above information is correct as of November 2011.
For further press information please contact:
Hannah Gilmore or Stephanie Davey T: 020 7739 8899
e: B&CE@living-group.com
www.thepeoplespension.co.uk Follow us on Twitter: @peoplespension