Technical Guide: Operation For people, not profit

Transcription

1 The People s Pension Technical Guide: Operation For people, not profit

2 Title 2 The People s Pension Technical Guide: Operation

3 CONTENTS Summary 4 The People s Pension 5 A multi-employer scheme 6 One pot, for life 7 Retirement 7 Death 7 Member online services 7 Customer Service 8 Customer relationships 8 Complaints 8 Implementation 8 Transfers 9 Charging structure 10 Appendix I Awards 11 Appendix II Service Levels 12 Appendix III International Members 13 Appendix IV Sample customers 14 The People s Pension Technical Guide: Operation 3

4 Summary 1. The People s Pension has been designed to offer members the ability to have a single scheme for life. It is already the automatic enrolment solution of choice for many employers, large and small. 2. The People s Pension is provided by B&CE. B&CE is a not-for-profit company that has been running pension schemes for over 30 years. 3. B&CE s unique expertise, together with a purpose built pension proposition makes us able to provide a cost effective, hassle free automatic enrolment solution. 4. The People s Pension has a transparent 0.5% Annual Management Charge. 5. The People s Pension can be used as an employer s only scheme, or in conjunction with other schemes. 4 The People s Pension Technical Guide: Operation

5 The People s Pension Multi-employer mastertrust Managed & administered in the UK Contributions gross or net of tax Enrolled over 300,000 members in The People s Pension is a defined contribution multi-employer occupational pension scheme (with non-associated employers) established under Pensions Act 2004 and is regulated by The Pensions Regulator. Each participating employer has their own section of The People s Pension, but members can move between them according to their career progression. 2. The People s Pension has been designed to achieve the principles of a super trust as outlined by the NAPF in their response to the Government s consultation, Enabling Good Member Outcomes in Work Based Pension Provision. These principles require a super trust to have certain key features: to be a not-for-profit arrangement, 3. The People s Pension has all of these features. 4. In an automatic enrolment environment The People s Pension can be either a qualifying scheme or a non-qualifying scheme. It can also operate outside of automatic enrolment if an employer wants a scheme in place ahead of their staging date. 5. We prefer member contributions to be made before the deduction of income tax. However, it is possible to use the relief at source collection method, as used by Group Personal Pensions. If relief at source is used member contributions will immediately be grossed up, rather than waiting to claim it back from Her Majesty s Revenue & Customs (HMRC). to use its scale to deliver low costs, to be run in the interests of its members, to have an independent Trustee ensuring good governance for its members. The People s Pension Technical Guide: Operation 5

6 A multi-employer scheme Each employer has their own section of the scheme Employers can create multiple member categories Members have a single pot for life Annuity service available Death benefits are normally free from Inheritance Tax Member online services available 1. The People s Pension has been designed to provide each participating employer, and its subsidiaries, with its own customisable section of the Scheme. 2. Within their section of the Scheme employers are able to define different categories of workers with elements such as pensionable pay, eligibility and contribution rates. 3. Each section of the Scheme is fully independent of the others, meaning that no liabilities can affect a nonassociated employer. 4. Adherence to the Scheme is by Deed of Participation or Agreement. The Deed of Participation is a paper document which requires a signature from Directors of a participating employer. The Agreement is a simplified online process which requires a declaration to be made by an authorised individual in order to bind the employer to the Scheme. The Agreement is our preferred method of adherence. 5. Both the Deed and Agreement can cover a single employer or a number of associated employers that form a Group. Where two or more employers are part of the same Group they can use the same Deed or Agreement to participate, and any corporate acquisitions or disposals can be maintained online. 6. If an organisation or association requires a number of non-associated employers to participate, these would best be set up with their own individual sections to enable each to go their own way in the future if required. 7. When participating in the Scheme the only indemnity that we seek protects us against penalties incurred as the result of an employer excluding individuals from membership. These might arise where, for example, an employer was found to have discriminated against someone on grounds of gender or age. 8. Should an employer decide that they no longer wish to participate in The People s Pension they must only provide one month s notice to exit the Scheme. A longer period can be supported if this is more appropriate. There are no charges or penalties for employers leaving The People s Pension. 6 The People s Pension Technical Guide: Operation

7 One pot, for life 9. The People s Pension has been designed for today s transient workforces and to handle frequent changes of employment. 10. A member will only ever have one Personal Account in the Scheme. When a member leaves active service, or membership is created through a transfer in, their Personal Account is moved to a general deferred members section. Their Personal Account is then re-activated if they ever re-join through another employer. Our systems include processes that identify possible member matches, for example where names or NI numbers do not quite match. 11. Where the Scheme is being used prior to an employer s staging date we do not require prospective members to complete any documentation to achieve membership. 12. If a member moves to an employer that does not operate The People s Pension, or becomes self-employed, they may continue to make contributions. 13. The People s Pension can accept transfers in, either individually or as part of a bulk transfer at no cost to the member. 14. Should a member wish to transfer their accumulated fund to another provider we will not apply any penalties for transferring. Retirement 15. An agreement is in place with Partnership Assurance which ensures that members with even the smallest of funds can access enhanced annuity rates, and standard annuity rates that are at least as good as the average of the top five providers. 16. At present our standard retirement process assumes annuity purchase. All annuities are purchased in the name of the member. If a member wishes to make use of a non-annuity income solution, such as drawdown, we suggest that the member takes financial advice and makes use of the Open Market Option (OMO). Approximately 30% of members currently take up the OMO. At present around 40% of members retiring from our pension schemes receive an enhanced rate. 17. As our membership profile develops, in conjunction with the Trustee, we will continue to ensure that the retirement income options offered by The People s Pension meet the needs of our members. Death 18. In the event that a member dies before they are able to claim their retirement pot, their Personal Account will be paid at the discretion of the Trustee to the member s beneficiaries. 19. The death benefit remains discretionary and therefore is typically outside of a member s estate and free from inheritance tax. 20. An exercise to gather information about potential beneficiaries will take place in every case, but the Trustee will normally be guided by any expression of wish held on record. Members are encouraged to keep their expression of wish details up-todate to aid the Trustee. Member online services 21. The People s Pension has a secure online service that aims to provide additional services to support members of the Scheme. It offers access to fund information and management tools, with the ability to initiate investment switches, update their personal details and select a target retirement age that suits them, not their employer. The online functionality is continually developing, based on user feedback. The People s Pension Technical Guide: Operation 7

8 Customer Service Committed to excellent customer service Administered wholly in the UK Separate member and employer contact centres Relationship managers nationwide 1. Administration of The People s Pension is wholly carried out by B&CE Financial Services, with over fifty people dedicated to pensions administration and more than twenty individuals providing a technical support function. We have a particularly stable customer service team, with an average length of service of around 10 years. 2. Our customer service staff are dedicated to providing an excellent service and aim to simplify the member experience in any way they can. Staff are not targeted on call times meaning that the members they speak with truly understand the answers they receive. 3. When our new business modelling identifies requirements for additional staff the positions are filled ahead of demand, to ensure that our highest levels of service can be maintained at all times. Customer relationships 4. Participating employers have a direct telephone line for a member of the Corporate Client Services team. 5. B&CE also has regional Relationship Managers across the UK who provide assistance and guidance on all aspects of automatic enrolment and The People s Pension. Whilst they are not authorised or able to provide specific financial advice to either employers or employees, they are well versed in the complexities of automatic enrolment. 6. All telephone queries whether administrative or technical are answered by a person and we aim to answer 85% of all calls within 20 seconds. All calls are answered by a human being, never music or a recorded voice. The only exception to this is for members who wish to opt-out, who have the option to do so using our automated voice activated system if they wish. 7. If we aim to achieve only our target call resolution rate then we are capable of dealing with a six-fold increase from current call volumes. Even so we have acquired an overspill call facility. We have trained the staff there and they are able to respond to frequently asked questions or divert calls back to our dedicated staff. 8. All calls are made to low-cost 0300 numbers, giving members and employers cheap calls, even from mobiles. Our dedicated contact lines are available on weekdays from 8.30am to 8.00pm and weekends 9.00am to 5.00pm. Complaints 9. Customer satisfaction is hard to gauge. We perform surveys and conduct follow up calls to ensure that members are happy with the service that they have received. Inevitably some of our customers are not satisfied with the service provided but we are pleased that our complaint ratio is less than 0.01%. When we do receive a complaint about The People s Pension this goes through a two stage independent dispute resolution process. The first step is handled by the B&CE Complaints Officer and the second, should the need arise, is referred to the Trustee for its determination. 10. We have no external accreditation of our procedures but carry out regular customer surveys with both employers and employees and act on any findings of these. The results of these surveys are overwhelmingly positive. 11. Our Contact Centre has topped a League of Excellence in a mystery shopper survey of twenty two companies operating in the insurance and financial services industry We finished first in the League of Excellence for overall call grading based on 17 different categories of quality over a 12 month period to July In the event that a serious issue did arise, members of our Senior Management Team or the Trustee board would meet with our customers to ensure that matters can be addressed at the highest operational levels. Implementation 13. B&CE has an expanding Implementation Team that has the sole responsibility of implementing The People s Pension for new and existing employer customers. 14. The team has many decades combined experience in the implementation of pension schemes and financial services products. 15. An Implementation Co-ordinator will be appointed to each employer customer to oversee the implementation of The People s Pension. Members of the Client Customer Services team will be the on-going client contacts, are allocated. In addition, where required, there is support from the IT, Communications, Technical and Finance departments. 16. The majority of queries that clients have can be covered remotely using modern technology to facilitate conference calls and interactive web meetings. 8 The People s Pension Technical Guide: Operation

9 Transfers Transfers in & out at no charge Bulk transfers possible 1. In keeping with our view that a member should only ever have to have a single pension pot for life, The People s Pension will facilitate transfers in and out of the Scheme without charge. 2. Transfers can be requested by members on an individual basis. Where an employer wishes to help their employees transfer in we are able to co-ordinate the issue of a joint communication informing them of the possibility. As a nonadvisory company we will not advise individuals about their transfer, although we do issue warnings about possible pitfalls of doing so. 3. Under some circumstances it may be possible for the trustees of an existing occupational trust based scheme to transfer benefits into The People s Pension in bulk without member consent. This may arise where the transferring scheme is being wound up in whole or in part, where the trustee is seeking to secure benefits for a group of members or where the scheme is entering the Financial Assistance Scheme (FAS) or Pension Protection Fund (PPF). 4. In these circumstance The People s Pension is able to accept transfers in respect of members and ensure that cash entitlements and early retirement dates allowed by HMRC are preserved. In some cases it may also be possible to accommodate some investment based entitlements or protect against investment penalties caused by the transfer. 5. An advantage of a bulk transfer in to The People s Pension rather than to a traditional Section 32 buyout plan is that a member can continue to have contributions paid into their account after any bulk transfer. This is useful where the participating employer is making the transfer, or where the member is enrolled by another employer participating in the Scheme. The People s Pension Technical Guide: Operation 9

10 Charging structure 0.5% Annual Management Charge (AMC) No contribution or monthly charges No employer charges 1. The only charge under The People s Pension is a transparent AMC of 0.5% levied on members funds. 2. Our AMC includes asset management and administration charges along with costs of any support provided to the employer. The charge applies to both active and non-active members, regardless of fund selection or size. Our AMC is equal to the Total Expense Ratio (TER). 3. The AMC is collected from the unit price on a daily basis, at a rate of 1/365th of 0.5% per day, not by unit cancellation. 4. We are members of the Association of British Insurers (ABI s) working group on disclosure of charges and have participated in the NAPF s work on charge disclosure for occupational pension schemes. 5. In common with the ABI guidance, transaction charges are reported separately to the AMC. Although they vary slightly, the typical transaction costs within each of our funds are 0.05%, equivalent to the current rate of stamp duty. 6. We do not offer commission terms, active member discounts or facilitate consultancy charging. 7. Because of the complexities involved in running separate charging structures within the same scheme, particularly where members move between employers within the scheme, we do not currently permit employers to pay any element of the AMC on their employees behalf. 8. As a not-for-profit organisation we are determined that the costs borne by members should only reflect the costs of running the Scheme. We are committed to reducing the AMC and the first such review is likely to be at the end of the phasing of automatic enrolment contributions. However, a review will be brought forward if The People s Pension exceeds current membership and contribution projections. 10 The People s Pension Technical Guide: Operation

11 Appendix I Awards Excellence in Institutional Pensions WINNER 2012! DC Mastertrust/Bundled Services WINNER 2013! Auto-Enrolment Provider of the Year WINNER 2013! Investors in People AWARD 2013! PQM Ready AWARD 2013! League of Excellence WINNER 2013! The People s Pension Technical Guide: Operation 11

12 Appendix II Service Levels Service Standards Telephone calls 80% of calls to be answered within 20 seconds. Abandonment rate: no greater than 5%. Call monitoring score for quality and accuracy: over 85%. Employer queries The following queries to be resolved within 5 working days of receipt: . Online Service enquiries. Letters. Administration Process the following on working day of receipt: All valid payments. Process the following within 1 working day of receipt: Overnight uploading of pension files. Any changes to account details, including contact information and bank details. Process the following within 5 working days of receipt: Set up new schemes from receipt of completed account set-up form. Complaints Respond/acknowledge within 5 working days. Final response within 20 working days. Staff competency and capability The Continuous Development Programme, measured through a skills matrix, will target Administrators to maintain Fully Competent grades in quality and productivity across at least 80% of customer processes. 12 The People s Pension Technical Guide: Operation

13 Appendix III International Members 1. Employers may wish to use The People s Pension as a pension vehicle for workers on short-term secondments, or overseas workers whilst they are not in the UK. These workers may or may not be subject to automatic enrolment regulation, depending upon the circumstances of their employment. 2. Where an employer wishes to enrol seconded or overseas workers they must meet the following criteria: Any employee contribution is remitted gross of income tax. The People s Pension is not able to reclaim tax for overseas workers through the relief at source system. 3. Cross border pension regulations apply to members who are subject to the social and labour laws of another EEA state. The EEA comprises the EU states, except Croatia, plus Iceland, Norway and Liechtenstein. 4. It should be noted that under the rules of The People s Pension, a member who becomes subject to cross border regulations is deemed to have left membership on the day before they became subject to them. 5. Where required transfer can be made from The People s Pension to Qualifying Recognised Overseas Pension Schemes (QROPS) at member request, following provision of required information. The overseas member is employed by a participating employer, and is not selfemployed. The Trustee is informed of any overseas member(s) of an employer. The employer confirms that any overseas worker(s) are, or have been, UK relevant individuals for taxation purposes. A personal address is provided where a member s home address is overseas. The employer confirms that any worker(s) in an EEA state are seconded, and provides a termination date for the secondment. The employer indemnifies the Trustee for any and all costs & penalties incurred in having to become a cross border scheme as a result of failing to supply information or providing inaccurate information. The People s Pension Technical Guide: Operation 13

14 Appendix IV Sample customers TRADE ASSOCIATION MEMBER British Furniture Manufacturers 14 The People s Pension Technical Guide: Operation

15 The People s Pension Technical Guide: Operation 15

16 For people, not profit B&CE is a not-for-profit organisation, which operates for the benefit of its members and their dependants. Established in 1942 and founded in construction, B&CE s current offerings include a workplace pension, employee accident cover, employee life cover and employee healthcare. Today it manages assets of 1.9 billion, with 2 million members and provides financial benefits to over 590,000 active individuals on behalf of over 6,700 corporate accounts. (Information correct as of 28 February 2014) For over 30 years, B&CE has been providing workplace pensions to employers with transient, low to moderate earning workforces, both large and small. B&CE has been operating a form of automatic enrolment for over ten years through its stakeholder product. In November 2011 B&CE announced details of The People s Pension, as an additional product to assist employers in complying with their automatic enrolment duties. The People s Pension, a Master Trust, is a multi-employer scheme with independent trustees. It is a hassle-free, flexible and portable workplace pension designed for people, not profit and is suitable for any organisation, large or small, in any sector. B&CE, as the provider of The People s Pension, was awarded Auto-Enrolment Provider of the Year at the UK Pensions Awards 2013 and best DC Master Trust at the Pension and Investment Provider Awards The People s Pension is the choice for any organisation, large or small, in any sector. It s for people, not profit. To find out more, or to register: thepeoplespension@bandce.co.uk Or call us on: Existing clients: Advisers: New enquiries: This information in this document is correct as at December 2013 and may be subject to change. B & C E Financial Services Limited Manor Royal, Crawley, West Sussex, RH10 9QP. Registered in England No To help us improve our service, we may record your call. B&CE Financial Services Limited is Authorised and regulated by the Financial Conduct Authority. Ref: The Company is a distributor of, and an administrator for, The People s Pension and the Employee Life Cover Scheme which are occupational pension schemes to which different law and regulation applies. Further details, can be found on our website b/0214