Over the last 10 years contract based group personal pensions have increased in popularity among employers and the A-day changes seem likely to accelerate this trend, claims new research from Clerical Medical.
The syndicated research, conducted by IQ research, looks at the factors which have influenced this shift towards contract based group personal pensions, since the introduction of the Pensions Act in 1995. It reveals 95% of the intermediaries interviewed believe new trustee responsibilities are one of the main drivers for change in smaller occupational trust based schemes.
New changes in pensions legislation on A-Day, including the introduction of more trustee respobnsibilities and member nominated trustees (Mnts), are likely to speed up this shift towards contract based and stakeholder schemes, claims the research. Clerical Medical says this change in attitude will provide intermediaries with an opportunity to review their existing occupational pension scheme arrangements.
The company suggests employers and trustees of occupational schemes should discuss with their adviser whether the scheme still meets their original needs and objectives. It adds that for those who are planning to review their current arrangements, although some employers will choose to stay with their existing trustee based scheme, it may be worth while considering a switch to a contract based group personal plan or group stakeholder plan.
Clerical Medical has also updated its existing Pre A Day opportunities business guide with a new section devoted to helping intermediaries review their clients arrangements. The material includes timeline considerations, case studies and guidance notes on legislative change to help employers and trustees identify the impact of the A-Day changes and consider their options.
Martyn Nethercott, marketing manager of group pensions at Clerical Medical, says: “The recent research clearly identifies a market trend and the issues that should be considered when reviewing active schemes. A-Day provides employers and trustees with an ideal opportunity to review their arrangements with their advisers and ensure their scheme remains cost effective for their current and future requirements.”
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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