Rather than being another box ticking exercise on their pensions to-do list, employers could use re-enrolment to review scheme governance, says Jenna Gadhavi
As the final wave of employers prepares for auto-enrolment, many earlier adopters are now starting their triennial re-enrolment process.
Employers need to re-enrol all of their employees that have previously opted out of a qualifying pension scheme if they are eligible to do so on the employer’s re-enrolment date.
But far from being just another item on their never-ending to-do list, re-enrolment can be used as an opportunity for an employer to assess their scheme and decide whether a change in strategy, supporting technology, or even provider is needed.
Whether a scheme’s biggest governance priority is acting in members’ best interest, getting value for money, or communicating with their members, re-enrolment could the perfect trigger to review current arrangements.
It’s also a good time to look at what element of the scheme is most important to your workforce, whether the current provider facilitates that, and if some changes could help engage with those employees that chose to opt out in the first place.
Bigger isn’t necessarily better
And this affects schemes of all sizes. The volume of employers using a master trust arrangement has grown exponentially since the start of auto-enrolment in 2012.
But as the recent Pension Schemes Bill has highlighted, scheme governance should be scrutinised across the board. The hugely variable quality of some master trusts is driving more robust regulation, raising issues not only about governance within master trusts themselves, but also about employers’ involvement in the management of the pension schemes they provide.
So use re-enrolment to engage your workforce. How are the funds performing? What companies and sectors is the scheme investing in? How good is your scheme governance? And if you’re not happy with the answers to those questions, maybe it’s time to make a change…
Reward’s sister publications, Pensions Insight and Engaged Investor, in association with NEST, want to find out what good governance looks like. Help us by sharing your thoughts in this short survey, which you can complete by clicking here.