With scam awareness month taking place in July, Stuart Price, Partner and Actuary at Quantum Advisory, explains what employers can be doing to protect their workforces’ pensions.
Stuart said: “I’m a strong believer that employers should take a bigger responsibility for their employees’ pensions; from educating them about how important pensions are and providing more detail about their options, to warning them of possible scams they could fall victim to when moving their pensions from one arrangement to another with the potential of losing all or a large proportion of their savings.
“I appreciate this is easier said than done and it is difficult for employers, particularly the latter point, as employees are likely to transfer out of the employer’s pension arrangement after they have left the company.
“Most employers have group personal pension (GPP) arrangements so the contract is between the employee and the pension provider. Unlike occupational schemes – where the trustees and employer have a legal duty to protect the interest of all beneficiaries including ex-employees – with GPPs there is no obligation for employers to govern these arrangements to the same extent, although some do.
“An ideal outcome would be for all employers to have to carry out a periodic all-round, more holistic education to their workforce of the importance and the advantages of saving for a pension, and to help reduce the likelihood of pension scams occurring, could include promoting the Financial Conduct Authority registered list of trustworthy advisers. Companies should also include scam warnings within a leaver’s termination communication.
“With HM Treasury recently rejecting calls from the Work and Pensions Committee to extend the cold-calling ban to face-to-face approaches, it seems workers are still at risk of scams further highlighting the need for support.”
Stuart Price, Partner and Actuary at Quantum