The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Welplan is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.
THE PARLIAMENTARY REVIEW
Highlighting best practice
30 | WELPLAN
Chief Executive BruceKirton
Pension providers frequently get bogged down by complexity.
Side-tracked by technical issues, the industry often forgets
its purpose, which is to provide employees with a secure
retirement. Welplan is different. They have always been focused
on the needs of employees. Providing pensions is at the heart of
their approach to supplying staff benefits and they make it easy for
a smaller employer to offer these advantages to their employees.
Chief Executive Bruce Kirton expands.
We have made pension provision simple and cost-effective. Our master trust enables
small businesses to provide for their members of staff at no additional expense. We
also explain to accountants and financial advisers how our tools can benefit their
clients and, ultimately, the employees of those organisations.
Welplan makes administration as simple as possible for a company. That means their
senior staff have more time and energy to focus on their employees. We free up the
space and resource for the organisation to focus on more important matters, such as
running their business, as well as effective communication and providing guidance on
pensions and benefits.
Talking to staff about pensions is tough. People are reluctant to think about the long-term.
We actively encourage members to talk to us. In our opinion, talking over the phone is
an underrated form of communication. We have always understood how a friendly voice
at the other end of a line can provide comfort and help to build a connection, and we
also make the most of the internet to communicate the key facts clearly. For example,
we use simple online tools to illustrate complex concepts in a straightforward manner.
We listen to our members and provide what they want. We are just about to launch a
lower carbon emissions and green revenue fund because of member interest. We have
also introduced two funds that would provide either an annuity or income drawdown
at retirement to give additional flexibility depending on the member’s needs.
Because we are not like most other pension providers, we take a different approach.
The company evolved from a trade association. In 1965, the Heating and Ventilating
Contractors’ Association launched Welplan to provide workers with holiday pay and
other benefits as part of their National Operative Wage Agreement. Even our location
is unusual. While most financial firms are concentrated in large cities, Welplan is
based in Penrith, Cumbria.
Pension provision is in our company’s soul. In 1988, Welplan launched a multi-employer
pension scheme. Three decades of providing pensions as well as understanding small
employers enables us to fill a big gap in the economy, because many larger pension
providers don’t think the smallest businesses are worth the effort.
AT A GLANCE
»Chief Executive: BruceKirton
»Established in 1965
»Located in Penrith, Cumbria
»Services: Pensions and
»No. of employees: 25
BEST PRACTICE REPRESENTATIVE 2019
»Accreditations are at the core of
the Welplan Pensions offering,
demonstrating that our high
standards have been independently
assessed and verified. For three
consecutive years, Welplan
Pensions has been a holder of the
Master Trust Assurance Framework
standard, which recognises the
quality of our governance and
»Welplan Pensions has been
awarded a five-star rating by
independent research organisation
Defaqto in 2017 and 2018. This
is the highest-achievable rating,
given only to financial products
or services assessed as “excellent,
with a comprehensive range of
features and benefits”.
»We have also held Pensions Quality
Mark READY status for four
consecutive years, affirming our
emphasis on clear communications
and good governance.
While NEST Corporation was established
to ensure no employee was left behind
during auto-enrolment, we offer a cost-
effective alternative solution. We want the
smallest organisations to have a choice.
As a small pension provider, we know all
about using our resources efficiently. We
differentiate ourselves from our larger
counterparts by focusing on personal
service and helping small and medium
employers get on with running their
business. Our small size makes us nimble.
We have used our adroitness to stay
ahead of the competition. For example,
we launched a stakeholder pension several
years ahead of the deadline, before
launching an auto-enrolment product two
years prior to it becoming mandatory.
The high level of regulatory change does,
however, present a challenge to a small
provider like Welplan. We welcome the
more rigorous standards that aim to
improve consumer confidence in the UK’s
pensions systems, but we work hard to
avoid becoming engulfed by regulatory
compliance and to avoid forgetting that
pensions are about ensuring a secure
retirement for our members.
Our biggest financial challenge has
been to keep pace with changes in
legislation as well as ensuring we stay
ahead of the curve and don’t fall behind
our competitors. The more money we
spend on complying with rules, the less
we can invest in member services. As a
small provider, we are innovative, which
gives us an edge over larger rivals.
An industry in flux
Pension provision is a peculiar business.
The aim is to provide a secure retirement
income for the members. But the final
consumer of the product has no choice
over its provider: the employer makes
this decision on their behalf.
This paternalistic system has allowed
the industry to almost forget its ultimate
aim. It has become inward looking and,
when it does communicate with the end
consumer, it uses an impenetrable jargon.
But the introduction of auto-enrolment as
well as freedom and choice legislation has
forced others in the industry to emerge
from their ivory tower and to learn how
to talk directly to scheme members.
Our origins make it easier for us to put
the needs and desires of employees
front and centre. Welplan wants to
maintain that edge so its members will
always know they will have a secure
retirement. To ensure the long-term
success of auto-enrolment, the industry
needs to encourage members to save
more. The new contribution levels of
eight per cent of earnings are a good
start but it is not enough to provide the
right levels of income to give people a
decent standard of living in retirement.
That’s not the only challenge. The
introduction of freedom and choice
legislation made the industry ask how
to best provide their members with a
pension. While annuities still provide
peace of mind, very low interest rates
mean these products seem to provide
poor value for money. Nor is it realistic
to expect scheme members to become
experts in managing investment
and longevity risk as they approach
retirement. An effective solution needs
to be found and Welplan wants to help
shape that debate.
Freedom and choice have also increased
the risk of pension scams. The Financial
Conduct Authority recognises this
danger and launched a new campaign in
August 2018 to prevent members from
being conned out of their pension pots.
Pension providers can help in this fight.
A master trust like ours talks regularly
to members who are looking to cash in
their pension pot, which enables us to
guide members in the right direction.
There is a reason why pension debates
often get bogged down in complexity.
This is a difficult challenge with
competing demands. We know we don’t
have all the answers but we will use
our experience of dealing regularly with
members to help find the best solutions.
The industry needs to
encourage members to
make it easier
for us to put the