Atkin trustees, actuaries, consultants & administrators

DC consulting

Defined contribution pension schemes are relatively simple – a percentage of salary is paid into an investment fund which is used to purchase pension at retirement. This gives certainty over the level of contributions which is invaluable to scheme sponsors, however setting up and managing these schemes can be far from simple.

From an administration perspective, each member’s investment fund and contributions need to managed separately. They will often be able to change their investment strategy and need to be provided sufficient information to do so knowledgeably. The performance of the individual investment funds and, in particular, any default fund should be monitored and regularly reviewed to ensure that it remains suitable. At retirement, members can often choose from a wide variety of different benefits from inflation linked increases to children’s pensions, the cost of which should take into account their individual circumstances. It is therefore vital that trustees are confident their administrative and governance procedures are efficient, robust and reliable.

Then there is the uncertainty in the level of eventual benefits which will depend on the level of contributions paid, the amount of investment return and the actual benefits chosen. Managing this risk, and in particular ensuring that members understand their benefits, is key to running a successful DC scheme. It is only likely to be in the next ten to fifteen years that we will start to see this risk play out with members retiring on inadequate benefits and looking for someone to blame.

The DC landscape is also evolving rapidly with:

  • The introduction of auto-enrolment which will increase the number of DC members significantly and employers with no current arrangements will need to put them in place.
  • The abolishment of default retirement ages needs to be managed and the impact on the workforce and DC scheme understood. For instance, how will it interact with lifestyle switching and the default fund.
  • There is increasing innovation in how DC schemes are managed and set up, the assets available for investment and the options at retirement.
  • Meanwhile employees are looking for more access and control over their benefits and are more likely to challenge decisions made on their behalf.

In this environment, it is vital that schemes are designed to meet the actual needs, objectives and values of sponsors and their employees. That scheme trustees fully understand and are confident that the scheme is being administered correctly and are satisfied that members fully understand their benefits and the inherent risks.

As a specialist in working with small to medium sized pension schemes, we are well placed to work with you to design and manage a DC scheme designed to meet your actual needs rather than giving you the latest fad product.

We offer:

  • a practical and innovative approach that explores all possibilities
  • in-depth knowledge of current trends and developments in pensions legislation
  • thorough analysis of existing corporate pension liabilities and their implications for the future
  • clear and continuous communication with your pension scheme members
  • information and education for members, from the day they join to the day they retire

Our DC services include:

  • Third Party Administration and administration consulting
  • Governance setup and ongoing support
  • Investment advice and support
  • Benefit design and provider selection
  • Bespoke modelling tools to demonstrate the impact of different financial, economic and legislative scenarios on your benefit package
  • DC member communications
  • Guidance on what auto-enrolment and pension reform means for you

Atkin & Co has a friendly atmosphere to work in with an office which is set for the future. The staff are an enthusiastic, welcoming team that work closely together to deliver a professional and efficient service.

Team member, Atkin & Co