Defined-contribution (DC) pension schemes remain some of the most popular pension provision in the UK, so you need a robust offer for your clients’ needs.
TargetPlan offers group personal pensions (GPPs) and group stakeholder pensions.
Why choose a contract-based scheme for your client?
A main benefit of contract-based pensions is that there’s an individual contract between the member and the pension provider, with no fiduciary duty imposed on the sponsoring employer.
Some employers may also choose to set up their own governance group to monitor contract-based schemes. But a trustee board isn’t a regulatory requirement for contract-based schemes.
Contract vs trust-based schemes
When you’re helping your clients choose between contract-based and trust-based schemes, you may find it depends on their heritage and what they’ve had before. For example, if employers have had their own trust-based scheme in the past, they may be more open to this again.
Contract-based schemes tend to be chosen by employers who don’t have the experience or resources to maintain a trustee board.
With TargetPlan, you can offer the same robust administration and support, whatever type they choose – contract or trust-based.
To help you decide whether a contract-based scheme or a trust-based scheme is right for your client, here’s a comparison of how they’re managed and the oversight that’s provided to members:
| Contract-based DC scheme | Trust-Based DC scheme |
|---|---|
| We manage all aspects of the scheme, as your pension provider | Run by an employer through an appointed board of trustees |
| Operated based on a contract between the member and us, the plan provider | The trustees have a fiduciary duty to act in the members’ best interests |
| Each member has their own ring-fenced policy | Assets are legally ring-fenced away from sponsoring employer’s assets |
| Regulated by The Pensions Regulator and the Financial Conduct Authority | Regulated by The Pensions Regulator and the Financial Conduct Authority |
Our contract-based pensions
We offer:
- Group personal pensions
- Group stakeholder pensions
- Trustee Transfer Plan buy-out contracts
- Additional voluntary contribution (AVC)
Each of our defined-contribution (DC) schemes can be provided with full administration (including investment), or an investment-only service.
