The HR Manager’s Checklist to Selecting the Best Pension Plan

If you're researching pension plans for your company on your own, there are a lot of things you'll want to keep track of.For many companies, choosing the right employee benefits package is a key strategy for attracting and retaining top talent. This is no less true of pension schemes than it is of healthcare, life assurance, or other employee benefits schemes.

To assist you in finding the right pension plan for your company’s employees, Simon Shirley Advisors has assembled a brief check-list to picking the best pension plan to help ensure long-term commitment from employees:

Item #1: Who Manages the Money?

An important first question to get an answer to is “who manages the money in the plan?” Naturally, your employees will want to know that their pension plan is being managed by responsible, reliable individuals, ones who have the experience and connections necessary to ensure that the plan outperforms over time.

This usually means that when your company is comparing investment managers, you’ll want to choose a global investment manager over a local investment manager. The global investment manager typically has access to more resources and possesses greater expertise than the local investment manager. This means that a global investment manager is more likely to deliver better results for your employee’s invested pension money.

Item #2: Is the Investment Strategy Appropriate for the Age Range of Your Employees?

Generally speaking, younger employees may be more suited to taking on high-risk, high-reward pension investment strategies that may have a high long-term pay-off. On the other hand, older employees who are closer to retirement are much more likely to want to have safe, stable investment policies in place that reduce the risk of their pension plan falling in value just before they enter retirement.

Balancing these opposing needs is important to making sure that there is buy-in from both sets of employees.

Setting up investment portfolios for each employee that start out with the high-risk, high-volatility approach and automatically switch over to lower-risk, more stable strategies as the employee nears retirement is one way to give your employees the best of both worlds.

Item #3: The Cost of the Pension Plan

Adding up all of the costs of your chosen pension plan can help you establish how much "fat" there is in the plan, and see if the rates are competitive.When HR managers are going over the different pension plans and methods (funded vs. unfunded, etc.) with upper management, the cost of a given pension plan tends to be one of the larger sticking points.

For any pension plan, it is important to know:

  • The management costs your company will incur.
  • What the administration costs of the pension fund are.
  • What the advisor fees will total.

Check these costs and compare them in all of the pension plans that you are seriously considering for your company. Are the pension fund’s costs competitive? Also, who’s paying for the costs of the fund? With pension funds, these fees can be paid by the employees’ funds, the employer, or even both.

Item #4: The Delivery

It doesn’t matter if your employees are on the best pension plan possible if the advisors who communicate the plan to your employees are poor at communication. The ability of the advisors to advise/inform employees regarding the specifics of their pension plan is critical. Without effective communication, employees are more prone to not seeing their pension plan as a valuable benefit, causing it to lose its efficacy as a means of attracting and retaining top talents.

A top-notch pension advisory firm will be able to do more than just advise on a suitable pension plan, they will be able to provide valuable advice and assistance to employees on a wide range of areas and should be seen as a trusted resource for employees to turn to.

Item #5: Access to Information

The availability and the quality of information provided to employees:

  • on-line access
  • Charting performance
  • Regular updates
  • 1-2-1 annual reviews with the advisor

These are just some of the things to bear in mind to ensure your employees have access to the relevant information.

Researching every pension plan out there can be difficult and time-consuming, but choosing a suitable pension plan can pay off in improved employee retention and productivity by providing employees a long-term reason to be invested in your company.

Of course, you don’t have to go through this process of intensive research and vetting alone. Using the services of a trusted advisor can help you make this process quick and easy, and help your employees transition from one set of benefits schemes to the next more easily.

Learn more about pensions and other employee benefits by picking up a free copy of our employee benefits eBook at the link below:






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