NAPF ANNOUNCES THE LAUNCH OF THE PENSION QUALITY MARK
The National Association of Pension Funds (NAPF) has today announced that it will start awarding a Pension Quality Mark from 2009 for any employer offering defined contribution (DC) pensions that meet three core tests.
These schemes include occupational DC schemes, group personal pensions, group stakeholder pensions and, from 2012, Personal Accounts. Around five million people are saving in schemes that could benefit from the Pension Quality Mark.
Applications will open in early 2009. Successful schemes will be able to use the Pension Quality Mark logo1 on scheme literature and in job advertisements. The three core tests schemes will need to meet to gain the Pension Quality Mark are:
- Contributions: contributions of 10% must be available, with at least 6% (double the 2012 statutory minimum) paid by the employer. The total 10% contributions can be achieved through fixed rate contributions as well as more complex structures such as age-related or matching contributions. If contributions are 15%, with at least 10% from the employer, then schemes can apply for a Pension Quality Mark Plus.
- Governance: governance arrangements must be in place to ensure that the scheme is operating in the best interests of members. This could take a variety of forms including trust boards, management committees or an annual scheme review.
- Communications: the scheme must provide clear and simple information to members when they join the scheme and thereafter.
Launching the Pension Quality Mark at the Association’s Annual Conference and Exhibition in Glasgow, NAPF Chairman, Chris Hitchen, said: “The Pension Quality Mark is an important new development which will benefit both employers and employees. It is a simple benchmark that employers can use to demonstrate the value of their pension both to current and to potential staff. It will also help employees to understand more about their employer’s pension arrangements.
“I am confident that Pensions Quality Mark can play an important part in promoting retirement saving through the workplace.”
The Pension Quality Mark scheme will be governed by an independent board of key stakeholders including representatives of employers, members, pension providers and relevant experts. They would have responsibility for overseeing the operation of the scheme. Discussions with stakeholders have indicated wide support for the initiative.
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