Pension schemes are rapidly changing. After the transition to career average schemes, we now see the transition to defined contribution schemes. Employers are challenged to manage their pension risks and at the same time offer their employees a well appreciated pension scheme.
Employers want their pension scheme to suit the corporate culture and other employment conditions and their employees to appreciate their investments. The risks of defined contribution schemes are largely with the individual employee. For the employees it is therefore important to understand the available options, in order to make informed decisions about their pension investments. This requires high quality communication relating to the pension scheme, by both employer and pension provider.
LCP assists employers, works councils and pension fund management to reach an optimal pension scheme based on the available pension budget. There are more opportunities to achieve this than it seems at first sight. Besides the investment insurances also for instance guaranteed pension benefits can be purchased with the available contribution or a collective defined contribution scheme (CDC) could be set up. Moreover it is possible to introduce investment guarantees for these schemes.
Before 1 January 2015 all defined contribution schemes will need to be modified by the introduction of the net contribution ladders. When introducing or amending a defined contribution scheme this must be taken into consideration.