Almost half of employers and pension trustees positive on offering member guidance

Just under half of employers and pension trustees are offering or considering offering some form of financial guidance or advice, according to Sackers.

The law firm, which obtained the survey results from a recent webinar, noted that the results “do not come as a surprise” due to the increasing frequency of defined benefit (DB) to defined contribution (DC) transfers and the “rapidly developing area” of guidance and advice.

Sackers associate director, Emma Martin, commented: “As it has become increasingly clear that members are making poor decisions, it is good to see that trustees and employers are looking at more ways to help support members.”

Martin stated that, while it once may have been preferable to avoid giving guidance and advice “for fear of member challenge and regulatory risk”, employers and trustees were now more willing to get involved because of “recent regulatory guidance clarifying what trustees and employers can do and how to mitigate these risks”.

With this in mind, she added that the key to ensuring good outcomes for members, as well as protecting trustees and employers, is process.

Martin explained: “A well-managed process for facilitating financial education will include clear objectives, careful selection of financial education providers or regulated advisers, proper contractual arrangements, member communications, and a real focus on monitoring, reviewing and recording decisions.

“While there is more clarity for those embarking on financial education initiatives now, those schemes who might have put something in place a few years ago should not panic.

“It would, however, be sensible for them to review member communications, contractual terms and any benefit modellers to ensure they still fit within the legal and regulatory framework and consider adding some elements of monitoring and review if these aren’t currently in place.”

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