An education and communication programme for members of both defined benefit (DB) and defined contribution (DC) occupational pension schemes is being offered by Mercer Human Resource Consulting as part of its all-in-one retirement service.
Mercer says its new integrated service, ‘Mercer Retirement Solutions’, will combine pension scheme management, administration, asset management and member communications for a fixed fee.
It says it will also focus on providing an effective member education service, as a initial research from a Mercer survey of over 1,000 employees shows more than two-thirds are unsure of the basic differences between cash, bond and equity funds, while 75% prefer safe investments over riskier high-growth options.
As a result the new service aims to offer members access to information and education across four key channels, while members can choose how they want to receive the information with the options of:
- Traditional paper based materials,
- A helpline
- Online access
- Face-to-face facilities
Simon O’Regan, head of Mercer’s UK and Europe region, says: “Clearly we have a lot of work to do in improving members’ understanding of their investment options and performance, and alternative low cost, no frills state sponsored pension services will struggle to meet this need.”
The new service, which has been signed up by 13 clients, will also inform trustees of any legislative changes, carry out pension administration including record keeping and accounting and asset management including advice on investment structure and access to multi-manager options.
O’Regan says the pensions white paper does little to resolve the immediate issues employers face, with the long lead time for pensions reform actually increasing the urgency to deal with the current issues of cost control, risk management and administrative burdens on employers.
He adds: “Companies want a simpler regime for running their pension schemes, especially as the move from DB to DC arrangements has, in itself, created greater complexity, as the market is a plethora of open and closed schemes with many employers running both types, which will need to be managed for many years to come.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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