Outsourcing pension risk

Education, engagement and empowermentHow technology can help

Henry TapperDirector First ActuarialFounder Pension PlayPen

The Future of Pensions Consulting

No one ever said that Payroll would need to become expert at pensions. Pensions are complicated and choosing a pension for your staff is an activity that should, according to the Regulator, be conducted only with skill and knowledge. The Office of Fair Trading concluded that SMEs and Micros do not have this skill and knowledge; when it came to workplace pensions they said they had seldom encountered such weak purchasers.So employers need help in choosing pensions but they are not getting it. In this presentation I will explain why payroll software providers and the agents that use it are being called upon to provide advice on pensions and particularly who the employer should use as the qualifying workplace pension provider.I will explain the risks to payroll in assuming this function and how these risks can be outsourced to a trusted third party.Pension PlayPen is a digital service that allows employers to choose the pension that is right for them and to have that decision documented for posterity. It is available to software providers at a price of 99 per usage which can be borne within the pricing of the module or charged directly to the customer.

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How were going to do this

How have communications developed with the advent of the internet and social media Considering the need for increased employee financial education: Who should provide this How do we provide focussed and targeted information in order to cut through complexity How to make employee engagement a central part of your marketing strategy Does the complexity of pensions make it a difficult subject to communicate? Has the evolution of the market and products available outpaced the education process?

What has the internet ever done for us?

The battle for the customer interfaceUber, the worlds largest taxi company, owns no vehicles. Facebook, the worlds most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the worlds largest accommodation provider, owns no real estate.(Tom Goodwin- Havas)

How do we deliver financial education in the workplace?EngageEducateEmpower

EngageGood intentions Fulfilment55% of people are stressed about moneyMoney is the number one cause of stress for employees40% of people say that money stress is affecting their productivity at work!Employers who implement some form of financial education in the workplace get a 3:1 return on their investmentSource CIBC

Face to face is bestGuidance trumps adviceGroups workYou just get one shot at it

Educate

Empower

Easily distributedTax advantagedFunConvenientTrustedIndependent

Organising information

Employee engagementa marketing strategy?Employer relationships hard won/ easily lostAcquisition costsManagement changesMarket forces

Employee relationships underestimated Harpoon in the whale Retail opportunitiesExecutive buy-inEasily referred

Are pensions too hard to talk about?

Are our products too complex to talk about?Intermediaries the cause of the problemContinuing to make matters worseRobo-solutions simplify decision makingTechnology our best chance

In summaryThe pensions contract has been broken 30 yearsAuto-enrolment is the consequence of that breakdownCurrent tax changes are fundamental and disruptive

For Pension Freedoms to work we will need new collectivesAuto-enrolment needs greater focus on workplace pensionsNow is the time to pay your pension contributions