Archive for the ‘NEST’ Category
A casual acquaintance or a rude awakening?
You know nothing ever seems to stay still in the world of pensions and benefits. As unbelievable as that may sound it’s not such a sleepy backwater anymore. The pace of change has really hotted up over the last ten years or so. We are seeing more and more case law and litigation which contests and re-defines large chunks of the status quo.
Not only is there UK legislation to think about but we also have the input from European Legislation on top. As if that wasn’t enough the plethora of Ombudsmen (I have no idea what the plural of Ombudsman is!) that we have in financial services and pensions also have their say. It’s for that reason that the old fashioned role of the “pension adviser” has had to change.
The Role of the Adviser
Historically for most smaller employers the adviser would “look after the pension scheme” which basically meant providing a basic level of admin support to the employer and signing up new joiners and dealing with leavers and retirements. If you were lucky they also looked after your group risk benefits and, even rarer still, your private medical care. That model gives you the employer no protection whatsoever. No one has the job of keeping the employer on the straight and narrow and making sure that you comply with all of the legislation and regulatory changes.
I’m glad to say that things are changing and there are a growing breed of advisers, like 44 Financial, who see their role as part of the team of business advisers who keep the employer on track. The old aspects of admin and basic advice and information for members are normally still in there as part of the service. It’s really that the principal role of the adviser has been redefined – and for the better.
The Daily Telegraph Case
What, you might ask, has this got to do with me? A recent article in Employee Benefits magazine highlighted the growing number of workplace disagreements. You can read the full article here. The interesting part for me was the Case Study that explained the judgement against the Daily Telegraph in the case of acworker who had been termed a “casual”. You can read the Case Study here.
Most (but by no means all!) of the benefit eligibility criteria that exist today have been amended to take out any discrimination on the grounds of age, gender or part-time employment. Your employees on fixed term contracts have also been accommodated after the UK introduced rehulations to comply with the European Directive. Chapter and verse on the regulations is here. However, the vast majority of employers that we have worked with still exclude employees who work on a “casual” basis. Admittedly it doesn’t affect every employer but you’d be surprised when you speak to employers how many temporary employees they have from time to time. If you have employees like this are they excluded from your benefits package if they don’t come under the Fixed Term Regulations?
This initial Employment Tribunal judgement in the Telegraph case ruled that the employee was entitled to the full package of benefits. It has now taken a further judgement from the Pensions Ombudsman to rule that access to the Pension Scheme should have been granted.
I can only guess that as time goes on and employees become more aware of the benefits provided and their entitlements that this type of case will increase.
Where do we go from here?
We’ll be talking to our clients about the use of temporary or infrequent employees to gain some idea of how widespread the issue is. It’s likely that we will recommend that some clients take advice from their employment law advisers.
It’s almost definite that we’ll recommend that changes are made in the long run to the eligibility criteria for various benefits.
That’s what we’ll be doing for our clients. What is your adviser doing for you? We’re currently offering, at our expense, an initial consultation for our Your Benefits Roadmap programme to the first 20 employers who subscribe. If you want to find out more and how this could not only save you money but keep you on the straight and narrow please contact us at talk2us@44financial.co.uk.
Is it Déjà vu – Or have we just been here before?
It’s funny how we seem to be on a carousel rather than a straight line where the crazy world of financial services is concerned.
It only struck merecently that the latest round of job cuts, consolidations, mergers and takeovers has been a symptom of our industry for quite a few years now. You have to be adaptable to change in financial services. Only recently we have seen Resolution buying first Friends Provident and then the newly merged group buy most of the interests of Axa. As if that wasn’t enough the combined group (called Friends Life I believe) has just bid for the protection part of BUPA. I hope that you are keeping up with all this so far.
On top of this we have some big players in the market redfining what they want to offer. Take Aegon for example.
All this has a very old feel to it. The same thing happened after 2001 when Stakeholder Pensions were introduced. The pensions market was decimated as the government placed a price cap on products. I have umbrellas in my office that have lasted far longer than the product providers that gave them to me!
I can’t help thinking that having lived the the whole thing about five years ago there’s more consolidation and repositioning on the way. It all gets terribly confusing for a simple IFA like me to keep up with all the name changes and who owns what. That’s not the main issue.
It’s unlikley that the general public’s suspicion of financial products will be improved by the merry go round of mergers, changes and strategic reviews that we are seeing.
With the NEST monster still coming over the corporate hill it’s likely that we’ll see even more financial pressure on pension providers. I can here the merger carousel creaking into life as we speak.
Never mind, when the music stops we can all get off. By that time there’ll probably only be two providers left AvivaFriendsLegal&GeneralPrudential and ScottishLifeWidowsStandardLife.
Yours until the monster arrives.
Steve
The Universe will provide!
Mark is a client and friend of mine I have known now for probably ten years. I’ve learned a lot from Mark over these years.
One of Mark’s mantras is that “the Universe will provide”. In other words do all the right things in life and things will happen for the good – often out of the blue. And funnily enough they do! Mark has held some really good positions in various companies in the horticulture sector At times things haven’t worked out but Mark’s positive attitude has ensured that things fall into shape. It’s also a self fulfilling prophecy. It’s a bit like Gary Player’s often quoted retort to a journalist when he said “the more I practice, the luckier I get”.
Mark is one of the people that I make a point of speaking to when I need an injection of positivity. Sometimes, in the early stages of thinking about leaving behind the well paid job I had doubts, insecurities, worries about it all. A phone call or lunch with Mark is all that it takes to inject a positive outlook and for me to see things with added clarity and vision. Everyone should have someone like Mark.
Thinking today about Mark’s mantra I felt a sense of worry. Not for my own future but for that of a whole generation of the UK population. The worrying thing for most people in the UK – and this cuts across age, sex, income – is that they believe the Universe (or more accurately the Government or some mythical benefactor) will provide for them. However, unlike Mark who actually puts in an enormous amount of unseen effort (think swan under the surface here) these people are doing little or nothing. And that’s worrying.
As a nation we are sleep walking towards a very poor old age with the prospect of continuing to work till we are all well into our late 60’s. The latest Government changes to the State Pension Age just underline that. Compulsory pensions when they come will simply lull most people into a false sense of security as to what they will get when they retire. More of all this in later posts.
Meanwhile, I’ll carry on worrying and hope that the adage about the cobbler’s children having the worse shoes doesn’t apply to financial planners.