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Over the last decade or so, many employers have closed their defi ned benefi t (DB) pension scheme to new employees and increasingly ceased accruing benefi ts for existing members.

To better control their costs, pension provision has slowly transitioned to defi ned contribution (DC) and in 2014 we reached the tipping point, where more UK employeeswere in a DC arrangement than a DB scheme.

Managing your

deferred member costs

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For employers only. Capita Employee Benefi ts is a trading name of Capita Employee Benefi ts Limited and Capita Employee Benefi ts (Consulting) Limited. Part of Capita plc. www.capita.co.uk. Capita Employee Benefi ts Limited and Capita Employee Benefi ts (Consulting) Limited are registered in England & Wales No: 02260524 and 01860772 respectively. Registered Offi ce: 17 Rochester Row, Westminster, London, SW1P 1QT. Separately authorised and regulated by the Financial Conduct Authority.

If you would like further information about conducting a bulk transfer of deferred members to Atlas then please speak to your usual Capita Consultant or email atlasmastertrust@capita.co.ukNext step

The tough economic climate means that company expenditure on pensions remains under close scrutiny and for many employers running a trust-based occupational DC scheme there is an expense that needs to be considered: the ongoing administration costs of the deferred members in their DC pension scheme.

Based on the Pension Regulator’s database on scheme returns in January 2015, there are now over 1 million deferred members of DC schemes; accounting for approximately 30% of the overall membership. Many of these may well have left the employment of the scheme’s sponsoring employer and some may even work for competitors.

This issue has been exacerbated since the introduction of automatic enrolment: higher numbers of joiners lead to higher numbers of leavers, in turn increasing the population of deferred members of DC trust-based schemes.

The abolition of short-service refund lump sums will add further numbers to the category of deferred members. Members who would have “cashed in” their pension contributions if they left within two years of joining a trust-based DC scheme will no longer be allowed to do so.

The cost of deferred membership can be a signifi cant issue for sponsoring employers and will continue to grow.

Recognising this, Atlas offers employers a trusted arrangement that can accept the bulk transfer of deferred members from an occupational trust-based DC pension scheme and look after these members through to their retirement and beyond.

In doing so, employers can reduce or, in the right circumstances, eliminate the administration costs of looking after this element of the scheme membership while also discharging their ongoing fi duciary duties to our independent board of trustees.

We can support the entire deferred transition path, which goes far beyond simply managing the movement of funds. We can provide effective communications that deliver innovative and engaging member communications to which members can truly relate.

In addition, there will also be a need to obtain appropriate legal and actuarial advice before making the transfer, and we can work closely in partnership with you to provide all the necessary information to facilitate this process.

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