A new scheme to improve people’s confidence and understanding of workplace pensions has been launched.
The Pension Quality Mark, launched by the National Association for Pension Funds (NAPF), aims to highlight the defined contribution schemes that have met key qualifying criteria including employer contribution rates.
So far, seven companies have been awarded the Pension Quality Mark, including Marks & Spencer, Kellogg’s and Standard Life.
It is hoped that the scheme will raise awareness of workplace pension schemes, and give employees more confidence to join.
The three core standards of the award are:
1. Contributions of at least 10%, with a minimum employer contribution of 6%.
2. Governance arrangements must be in place to ensure the scheme is operating in the best interest of members.
3. Communications to members must be clear, engaging and easy-to understand.
Defined contribution schemes organised through an employer can be in the form of an occupational scheme, a group personal pension or a group stakeholder pension.
NAPF, which represents 1,200 pension schemes, says over half of employees would be more like to join their company’s pension scheme if it had been awarded a quality mark. And more than two-thirds would feel more favourable towards a potential employer if its pension scheme had an independent quality mark.
Joanne Segars, chief executive of the NAPF, says: “The Pension Quality Mark is an exciting new initiative which will benefit both employers and employees. It shows these employers’ commitment to encouraging their staff to save for retirement, which is becoming ever more vital.”
Other companies to have been awarded the Pension Quality Mark are Accenture, BG Group, IBM and The Royal College of Physicians.
Tony Hobman, chief executive of the Pensions Regulator, says the scheme will encourage higher standards and a benchmark of excellence.
"With volatile markets and a changing pensions landscape it is more important than ever at this time to ensure that standards in pension scheme management continue to improve,” he adds.