Is your Defined Contribution pension scheme fit for purpose?
Countdown to 2012
- February 2011
- 134 KB
- Do your Defined Contribution arrangements shape up?
- Area: Deloitte Total Reward & Benefits
The Defined Contribution (DC) pensions market is growing rapidly and is set to accelerate with the introduction of auto-enrolment from 2012. In our experience, many employers and trustees are taking this opportunity to review the suitability of their DC offering as a whole in light of the increased scrutiny from the Pensions Regulator.
To help employers and trustees review their DC arrangements Deloitte has developed a diagnostic assessment, reporting on five key aspects of running and managing a DC scheme, aligning market best practice with corporate objectives.
Our assessment looks at both trust based and contract based arrangements, and some of the key items covered include:
- Strategy and Design – What is the rationale for having the scheme and are there any design aspects which are needed to fit future requirements of the business?
- Cost and Efficiency – does the company operate SMART pensions on contribution collection? Is there a significant future cost exposure to auto-enrolment compliance post 2012?
- Governance – whether the scheme is trust or contract based, how well managed are the day to day aspects of the scheme and are there any holes in legislative compliance?
- Investment – What fund choices are available to members and are those choices appropriate for the membership concerned? What level of financial sophistication do members have?
- Member Experience – How reliant is the employer on their pension provider for communications, or does the scheme go above and beyond the minimum requirements?
To date, many employers and trustees have focussed on their defined benefit arrangements. Given the size and importance of DC arrangements, we believe it is important that appropriate consideration is now given to these benefits, and the approach of automatic enrolment means there has never been a better time to do this.
For further information, download our brochure Fit for Purpose: Do your Defined Contribution arrangements shape up? (PDF, 134KB)