Mark O’Connor from Bank of Ireland on using the changing pension landscape to support your people initiatives.
When we talk to business owners, finance and HR professionals today, a number of themes seem to recur – inflation is an obvious one but recruitment and retention of key staff are front and centre for many employers.
The recruitment consultants are telling us that salary and benefits expectations have risen and that a good pension scheme is considered a decent starting point and not an exception.
“The clock is ticking, in terms of making decisions regarding your pension scheme to maintain compliance”
So if you are to compete to win in the “war for talent”, you know your benefits package must be fit for purpose, must engage and now has to reflect a changing pensions landscape.
So there may be some considerations that fall into the “nice to do” category but there is a burning platform in the “have to do” space whereby ensuring compliance with some pretty substantial legislative changes is something you may need to address very soon.
Many Irish occupational pension schemes are established as single employer trust schemes.
By year end, the implementation of the IORP II Directive requires that they must come to terms with pronounced changes and administrative requirements with higher costs associated with them, such as the appointment of key function holders and the requirement for annual audits for all schemes irrespective of size.
There are alternative scheme structures that could be considered such as PRSAs or moving to an umbrella scheme structure via a “master trust.” No matter what you decide, change is inevitable.
Like any change process, the first steps for all parties impacted by this new directive, is to understand the changes required, determine their impact, identify the measures already in place to successfully address them, and finally come to a decision on how best to go about plugging the gap.
This gap analysis is critical in determining the alternative options available that are best suited for the company and its members.
This is where consultation and advice is paramount.
With so many changes taking place, members will become aware of new documentation and details within standard communication documents such as their Annual Benefit Statement. It is useful to make them aware of posed changes.
This could be a useful opportunity to kick off an exercise to engage scheme members to a greater extent.
Our audience research, in conjunction with Red C, shows that people struggle to understand pensions and what they can deliver at retirement. Tax relief confuses many and it can be hard to work out how their money is invested.
Bank of Ireland has partnered with a UK fintech business to introduce a revolutionary member communication solution to Irish pension schemes which aims to inform and engage scheme members through people-led, leading technology.
MyPension365 is an example of how technology can support good quality face-to-face member engagement to help them to understand, appreciate and value the benefits provided to them. Better employee engagement can support companies’ employee retention initiatives.
The clock is ticking, in terms of making decisions regarding your pension scheme to maintain compliance.
It is also an opportunity to get good advice on whether or not it is fit for purpose in terms of supporting your recruitment and retention needs.
It is an important benefit that’s of real value to members when they’re fully engaged.