We have JLT – Professional Pension’s “Administrator of the Year 2017” to thank for this headline. I can now reveal that the nonsense that inspired the Sun to question what was going on with the default investment fund of the Scottish Widows GPP – came from Benpal and JLT’s vaunted DC member interface.
In case you have forgotten this masterpiece in miscommunication , I have reprinted it at the bottom of this , you can read its translation here.
It was the Sun what done it!
Happily the Sun have decided that their readership deserves a proper explanation of why DC defaults are life styling into equities as well as bonds and cash. Scottish Widows owe me and Tom McPhail – but especially the Sun – a pint and a pie for helping put their readers straight. Hopefully, their explanation of what is going on with their policyholders pensions will be better than that of their employee benefits “agent”. If I was in Widow’s communication team- I’d be asking a few questions of JLT!
I last appeared in the Sun after being beaten up by some Man Utd fans at a party in the Manchester Art Gallery. That story got me onto page 3 and into trouble; so I was a bit nervous helping out on this. I needn’t have worried
Fortunately, the Sun’s journalists know how to report financial matters in the simple way people want their news and this article is responsible, vivid and real. Here’s the article in full.
If we are going to get messages out to ordinary people, we need to talk to them – not in the strangled compliance-ese that Benpal and many other administrators employ. But in clear language that captures and keeps people’s attention.
I was surprised and pleased that the Sun chose to run this story this Sunday, it shows that they see these things as important and that their readers do too. The damage we do to pensions through poor communications is in turning an opportunity into a PR disaster, as we so often do. The Sun turned that round for us, but the next time- and it will be this morning and every morning that an ordinary person picks up routine pension nonsense from their doormat – PENSIONS WILL SUFFER!
That Benpal nonsense in full!
Changes to your XYZ GPP Default Fund Strategy
Following the changes in pension legislation with regards to pension freedoms it is becoming clear more people are no longer purchasing annuities in such quantities as has historically been the case. An Annuity was previously the most common way in which you could secure a pension income for life with an Insurance Company.
The current XYZ GPP Default Fund Strategy is an Annuity Targeting strategy. Scottish Widows Investment Governance Committee and our own XYZ Governance Committee feel this is not a safe assumption for members any longer, and seek to change your current default fund to target Flexible Access. Flexible Access allows members to choose how they wish to draw their pension funds through retirement.
The only difference between the two investment strategies is what happens to your pension fund 5 years before your chosen retirement date, (normally age 65), with the new approach keeping more of your fund invested. The graphic below displays the asset mix of your current default strategy and your future strategy at your normal retirement date:
As you are more than 5 years from your plans Normal Retirement Age and because you have yet to enter the latter stage of the retirement glide path your pension fund will change to target Flexible Access from June 2017. Please note this will not affect your asset mix or risk profile of your pension scheme until 5 years from your Normal Retirement Age and there is no change to the plans charges.
Further details on this change will be sent to you directly from Scottish Widows to your home address during May. This letter will explain the changes in more detail and also gives you 60 days to consider and inform Scottish Widows if you do not want to proceed with the change to the new default strategy in June.