Background

A&B Ltd was established more than 30 years ago and had a money purchase pension scheme with approximately 40 active and 125 deferred members. The scheme was run on behalf off A&B by EB Consultancy with considerable input from A&B’s payroll administrator and a number of staff and board members as trustees.

Challenges

  1. EB Consultancy’s fees, borne by the employer, had risen dramatically in recent years and each ad hoc request for information was attracting an additional charge
  2. A&B’s payroll administrator was unhappy with her workload, supplying information to EB Consultancy for current and former employees
  3. The MD had become concerned about A&B’s obligations to the scheme, having recently read an article on the subject
  4. A&B was finding it increasingly difficult to find staff willing to volunteer to become scheme trustees and existing trustees were becoming concerned by their legal responsibilities
  5. A number of employees had voiced their concerns about lack of investment options

What we did

  1. Set-up a Group Personal Pension Plan (GPP) for active members, this required just spreadsheet generated by the payroll system and one page declarations signed by members
  2. Contacted all scheme members with opportunity to transfer accrued funds into the GPP or a plan of their choice
  3. Contacted all GPP members with range of investment options and a default alternative
  4. Gave all deferred and active members with funds still in the old scheme 3 months notice of intention to wind-up and opportunity to transfer to a plan of their choosing
  5. Transferred remaining members to Bulk Buyout Plan, by way of trustee completed form

The results

  • A&B received substantial annual cost savings as a result of EB Consultancy’s fees stopping and no fees being payable by A&B to Calculis
  • Payroll administrator’s workload substantially reduced, her sole input to pension is now monthly e-mail of payroll spreadsheet and joiners/leavers
  • A&B’s obligations have been minimised, now it just needs to make the contribution by direct debit by the set date
  • The need for trustees has been removed and hence also their liabilities
  • The GPP members now have access to a very wide range of alternative investments
  • Both members and the employer can access scheme information and valuations at any time online