Towry Law believes that many employers and employees are failing to receive good value from their Defined Contribution (DC) pension schemes.
This results in employers wasting money and places the retirement provision of their employees at risk.
Towry Law advises all companies, particularly SMEs who run DC schemes, to ensure they get the most appropriate corporate advice and to check that their schemes are meeting the needs of their employees.
In too many cases neither is happening.
Towry Law urges employers to ask themselves the following:
- Is the advice we receive on our DC scheme impartial and fee-based consultancy, rather than commission-based product selling?
- Do we and our employees have full transparency of charges?
- Have we provided our employees with suitable investment options, especially with regard to default funds?
- Are our scheme administration practices of a high standard and do we have robust governance procedures?
- Is there an effective communication programme in place for employees about our DC pension arrangements?
Pan Andreas, Head of Corporate Clients, Towry Law, said:
“The corporate pensions industry is still largely focused on selling pension schemes rather than providing the overall client-focused service proposition that is so desperately needed by both employers and employees.
“DC schemes are a popular method of pension provision, but typical industry practices mean that employers may receive poor value for money.
“We call on directors of SMEs to ensure they receive clear and impartial corporate advice, and that their employees are effectively engaged. If they are not, employers are likely to be wasting their money now and will face huge problems in the future as employees understand the true value of their pension provisions.”