MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.

23rd November 2017
:: Adviser | Works for all advisers | What do you do?

 
What do you do?
 
Almost every adviser organisation can benefit from using the services and tools that MyCompanyPension.co.uk provides on this website. Using the Scheme Member Zone and the Adviser Zone can help YOU to help your clients.
 
It’s not just for advisers, its for a broad range of personnel including compliance depts, paraplanners, technical personnel, T&C depts, to name a few.
  
   
 

There are many areas in which you might specialise
 
You are:
  • providing investment advice and / or
  • IHT planning 
You help your clients create and safeguard their wealth. Some of the planning that you do for them will no doubt relate to specific events which may occur in their lives, such as school fees, marriage and retirement. Perhaps your wealth creation programme plots these trigger-points against a timetable leading up to IHT mitigation.
 
Many of your clients will have benefits in employment based pension schemes and they may be in a position to draw a tax-free lump sum at some point in the future. The timing of when to take the lump sum could form an important element in your wealth creation timetable.
 
The amount of any lump sum available depends upon the Rules of the arrangement (and ultimately HMRC rules). For many scheme members the lump sum can be significant. Pre A-Day lumps sums which can be greater than those calculated on the new basis can still be protected from A-Day legislation, and this is something investment advisers ought to discuss with clients.
 
Where your clients do have the option of taking a tax-free lump sum from their pension, you should discuss the effect of the scheme’s cash commutation factors, where applicable. Are they poor or are they generous, and are there any other alternatives such as taking cash from any AVC’s? How do the rules of the arrangement affect these outcomes?
 
If your clients’ tax-free cash is in addition to their pension (rather than by commutation of their pension as is the case with many Public Sector defined benefit schemes) can they exchange more of their pension for cash up to HMRC limits? Would this be tax efficient or would they be better building up cash elsewhere?
 
For investment advisers, forward planning is therefore essential.
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You are:  
  • G60 (or equivalent) qualified
  • a pension transfer specialist
  • responsible for ‘grandfathering’ advisers
  • responsible for continuous professional development of advisers 
You never stop learning. Who hasn’t been to a seminar and had a flash of inspiration – or pang of anxiety - whilst listening to a speaker? There is always someone else with a different perspective and we become better at what we do with the more exposure we have to information.
 
You attain excellence in what you do by building upon your experience.
 
Our Scheme Member Zone is a very useful educational tool for advisers helping you to increase your knowledge and consider different perspectives.
 
Similarly, reading through our Questionnaires in the Adviser Zone will add further insight.
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You are a specialist who:
  • has developed your own forms and procedures
  • uses an insurance company / third party service to gather information
  • are responsible for compliance
  • are responsible for training and competence
  • are responsible for your treating customers fairly programme
  • advise on pensions and retirement planning 
The value of any service directly or through a third party depends upon the skills (experience and expertise) of the people who provide that facility.
 
If you rely upon a paper based service there is a danger that the information may be limited in scope or out of date.
 
The speed at which sources are updated is critical to reflect changes in legislation and practice.
 
Our Pension Analysis Questionnaire, for example, lists over 150 questions - it is one of the most detailed forms used to capture information from defined benefit schemes. Used alongside any existing service you already use will help you to resolve any weaknesses in data gathering and plug any gaps in the advice process.
 
Our questionnaires are regularly updated to reflect change and new experiences – they have evolved over a 20 year period and have been used with over 10,000 individual pension analysis cases, from 100's of different types of pension scheme. So they are tried, tested and proven to work.
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Your focus is on:
  • general financial planning
  • financial ‘health checks’
  • paraplanning
  • divorce  
To perform financial health checks, advise on divorce or to build reports and research you need to have excellent investigative skills. Essential to any health check, report writing or divorce assessment, has to be the obtaining of information from your clients’ pension provision.
 
Employment based pension schemes can provide not only retirement income, but may also provide a lump sum, dependants' benefits, ill health, early, flexible and late payment options. Each of these impacts upon areas which YOU will be advising your clients.
 
Obtaining comprehensive data is critical to achieve a detailed and meaningful health check that would stand up to rigorous scrutiny.
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You don’t do pensions - you deal in
  • mortgages and protection 
  • will writing 
As part of the service you offer, it would be prudent for you to identify what death benefits would arise from your clients’ pension schemes. This might affect the amount of cover your client needs. Death benefits can include a lump sum or survivors' benefits (spouse, civil partner, cohabiter, children, people who are financially dependent upon your clients and people who are financially interependent upon your clients - such as someone sharing a house or flat).
 
Many pension arrangements pay lump sum death benefits in the form of death-in-service for active members and these can be substantial. Since 6th April 2006, there is potentially no restriction to the amount of lump sum that is payable from a registered pension scheme. Prior to that, the maximum lump sum available on death of an occupational pension scheme member, for example, was 4 times salary (plus a refund of member contributions with interest).
 
Equally important is to find out what is available for former members of schemes as death-in service benefits may change dramatically when your clients ceased to be active members. Death benefits for preserved members vary dramatically from scheme to scheme and can range from NOTHING to the full value of the pension entitlement.
 
Most employment based pension schemes are trust based schemes which have discretionary powers; some can be quite limited whilst others can be wide-ranging. This enables trustees to pay death benefits according to the Scheme Rules. So it is essential to see WHAT death benefits are payable and TO WHOM.
 
Failure to establish these benefits could ultimately lead to accusations of mis-selling if your client had very generous scheme death benefits and you had sold mortgage/life protection without investigating what was available. Similarly, if you had anticipated excellent death benefits from your clients’ membership of a defined benefit scheme – and those benefits didn’t come to fruition on the death of your client, you are leaving yourself open to accusations and complaints. 
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You don’t do pensions - you deal in
  • healthcare 
  • employee assistance programmes  
Many employers have Employee Assistance Programmes (EAPs) for their employees which can offer a wide variety of services. Where your client leaves an employer, these services will invariably terminate either immediately or very shortly thereafter. You will need to establish what benefits were provided so that they may be replaced where necessary.
 
Getting involved with SIPPS
 
Although SIPPs have been around for a long time, they have become one of the growth areas over the last couple of years. Inevitably clients taking out a new SIPP as well as many of your existing SIPP clients will want to consider transferring their former work-based pensions into their SIPP for a variety of reasons (e.g. for consolidation, investment flexibility, personal control).
 
Our Pension Analysis Questionnaire lists over 150 questions. It is one of the most detailed forms used to capture information from defined benefit schemes. Used alongside any existing service you already use will help you to resolve any weaknesses in data gathering and plug any gaps in the advice process.
 
Our questionnaires are regularly updated to reflect change and new experiences – they have evolved over a 20 year period and have been used with over 10,000 individual pension analysis cases, from 100's of different types of pension scheme. So they are tried, tested and proven to work.  
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Summary
 
If you read the whole of this page you will have observed just how many ways your clients' employment based pension arrangements can weave themselves into the advice process. The Adviser Zone and Scheme Member Zone are designed to assist adviser organisations in a variety of ways which will help you maintain your highest standard of business.
 
   
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