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New benchmark for ‘quality’ pensions

New benchmark for ‘quality’ pensions

Category: Pensions

Updated: 22/09/2009
First Published: 22/09/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A scheme designed to help rebuild and promote public confidence in workplace pensions has been unveiled by the National Association of Pension Funds (NAPF).

The Pension Quality Mark (PQM) will certify that a firm's defined contribution pension scheme has met key qualifying criteria on contribution rates, governance and communications, with the aim of attracting more employees into such schemes.

The criteria that a firm's pension scheme will need to meet in order to qualify for the PQM include:

  • Contributions of at least 10% of salary, with a minimum employer contribution of 6 %
  • Evidence that the scheme is being well run and operated in the best interests of members, with an annual management charge not exceeding 1%
  • Clear, engaging and easy to understand communication to members.

According to recent research by NAPF, more than two thirds of employees looking for a new job said that a Pensions Quality Mark would make them look more favourably on a potential employer. In addition, over half said that an independent quality mark awarded to their employer's scheme would make it more likely that they would join.

Seven companies are to receive the award initially: Accenture, BG Group, IBM, Kellogg's, Marks & Spencer, Standard Life and The Royal College of Physicians.

"By providing a benchmark, the Pension Quality Mark can help people judge the quality of the pension scheme offered and companies will be able easily to promote that aspect of their employment package," said Doug Taylor, personal finance campaigns manager at Which?.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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