FAQs ABOUT PQM READY
1. Who can apply?
All trust-based multi-employer schemes that meet certain standards will be able to apply for 'Pension Quality Mark Ready'. Once a scheme has achieved the standard, the employers that use that scheme will find it easier to get the Pension Quality Mark for themselves - all they need to do is show they meet the standards on contributions.
2. What are the advantages for a multi-employer scheme or a master trust?
- Schemes can send a clear message to the industry, Government and the Regulator that they are raising standards in pensions and working to boost confidence in automatic enrolment.
- They can display the 'Pension Quality Mark Ready' logo on communications aimed at employers and the industry to demonstrate they have met the standard.
- Employers are able to identify a scheme which offices good governance, low charges and clear member communications.
- To quality for PQM Ready, multi-employer schemes and master trusts must meet the standards on governance and communications.
- The PQM Ready is renewed annually, when you will have to demonstrate that the Standards are still being met.
3. What are the governance standards for PQM Ready?
It is important that trustees can always act in the members' interests and independently of any commercial sponsor or founder. Therefore Independent trustees need to be in the majority or have a casting vote. The main trustee body must be chaired by an independent trustee. Trustees must have the power to make, break or vary arrangements with the scheme's fund managers and administrators. Neither the trustees nor any company associated with them can have a commercial interest in the scheme. We would not normally regard participating employers or their employees as having a commercial interest. Independent trustees do not have to come from a professional trustee company.
Trustees must also undertake training in line with the Pensions Regulator's Code on Trustee Knowledge and Understanding . Trustees have to regularly review key DC issues at their meetings.
All employers using the scheme must be able to access a default investment option with charges no higher than 0.75%. We appreciate that some employers may opt for a more expensive default, but if they do so it must be their own choice. The scheme needs to offer a simple range of investment options or a default option.
4. WHAT are the communicATIONS standards for PQM Ready?
Schemes and master trusts must have clear and engaging communications for members who join the scheme, on an ongoing basis and for members approaching retirement.
The full standards document with notes and examples is available to download. The PQM team will be happy to talk to you about how the standards apply to your master trust.
5. WHY IS THE CONTRIBUTIONS STANDARD NOT APPLICABLE?
In most cases, the scheme will not set the level of contributions. They will be set by the employer. So it would not be appropriate to assess the master trust on the level of contributions and pensionable pay.
Contributions are covered under the Pension Quality Mark which remains the reserve of employers. Employers using a PQM READY master trust can qualify for the PQM if the scheme meets the contributions standard, including pensionable pay.
6. How much does it cost?
There is an annual licence fee for PQM Readym which consists of £6420 + VAT and an active scheme membership (per member) charge of 0.015p + VAT. The total payable is capped at £18,650 + VAT.
7. I want to apply for PQM Ready. What do I do next?
You'll need to complete the form and send us the supporting evidence requested, such as examples of communications and agendas of your trustee meetings.
A full list of evidence required can be found on the last page of the application form. We are always happy to discuss your application with you at any point if you have any queries.
T: 020 7601 1736
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By providing a benchmark the PQM can help people judge the quality of pension scheme offered and companies will be able to easily promote that aspect of their employment package.
Doug Taylor, Which?