27 Jul 2000
Prudential to run TUC Stakeholder Pension Scheme
Prudential has been chosen as the commercial partner for the TUC Stakeholder Pension Scheme following an extensive six-stage selection procedure.
Announcing the decision, TUC General Secretary John Monks said: “Our goal is to ensure that the TUC Stakeholder Pension Scheme is the best on the market – the one against which other stakeholder pension schemes will be judged. That means teaming up with a top pension provider.
“The TUC Stakeholder Pension Scheme means the TUC can give working people and their families access to decent, value for money pensions.”
- Over half a million trade union members work for an employer that does not run an occupational pension scheme – they will have the chance to save for a cost-effective pension for the first time.
- A further five and a half million trade union members earning less than £30,000 will be able to use a stakeholder pension to top-up their existing occupational pension.
Jonathan Bloomer, Group Chief Executive of Prudential plc, said: “I am delighted that Prudential has been selected as the TUC’s commercial stakeholder partner. The TUC’s long tradition, combined with Prudential’s expertise as the UK’s largest pension provider is a strong foundation on which to build a high quality stakeholder pension scheme which is easily accessible and will benefit employees and employers alike.”
Full details of the TUC Stakeholder Pension Scheme will be announced at the TUC’s Congress, which will take place in Glasgow from 11-14 September.
A free TUC Information Pack on Stakeholder Pensions, containing information for union reps, employers and potential stakeholder pension scheme members is available by calling 0870 8 500 500. Information can also be found on the TUC Stakeholder Pension website at www.tuc.org.uk/stakeholder.
Notes to Editors:
Prudential plc is a holding company, subsidiaries of which are regulated in the conduct of investment business by the Personal Investment Authority and/or IMRO.
All TUC press releases can be found at www.tuc.org.uk
A series of TUC rights leaflets are available on the know your rights line 0870 600 4 882. Lines are open every day from 8am-10pm. Calls are charged at the national rate.
Media enquiries: Nigel Stanley 020 7467 1244 or 07699 755102 (pager) or Liz Chinchen on 020 7467 1248 or 07699 744115 (pager)
Other enquiries: Joanne Segars on 020 7467 1327 or 07699 718893 (pager)
Media enquiries: Vicky Hill on 020 7548 3462 e-mail VickyA.Hill@Prudential.co.uk or
Tina Christou on 020 7548 3719 e-mail Tina.Christou@Prudential.co.uk
TUC Stakeholder Pension - background briefing
Why is the TUC running a stakeholder scheme?
The TUC recognises that, whilst stakeholder pension schemes are not perfect (most notably because employer contributions are not compulsory) they will provide a cost efficient way for millions of people to save for a pension for the first time.
The provision of a TUC-wide stakeholder pension scheme will enable the TUC to get a better financial deal than would be possible from unions working individually. However, a few unions have already established their own schemes – a TUC scheme does not preclude others from doing so.
What the scheme will offer
- Lower charges – charges will be less than the maximum 1% allowed by law.
- High quality benefits.
- Trustees - who will ensure that members’ interests are put first.
- A range of investment options including an ethical fund.
- Links to external fund managers in addition to Prudential’s own funds, giving scheme members greater investment choice.
Size of the scheme
Over half a million trade union members work for an employer that does not offer an occupational pension scheme. These half a million break down as:
- 170,000 men in full-time employment
- 170,000 women in full-time employment
- 100,000 women in part-time employment
- 135,000 self-employed trade union members
In addition, around 5.5 million trade unionists earn between £9,500 and £30,000 per year. These people could benefit from the membership of both occupational and stakeholder pension schemes.
During the selection process Prudential scored very highly against the TUC’s assessment criteria. Prudential is able to offer high quality admin systems to support the TUC Stakeholder Pension Scheme and has a highly developed marketing strategy which can meet the needs of small unions and small employers. Prudential also has significant experience of providing group pensions and of working with affinity groups.
Prudential is one of the UK’s largest institutional investors and the largest pension and Unit Trust provider. It has over £150bn of funds under management, and employs over 22,000 employees worldwide.
Prudential has a recognition agreement with white collar union MSF.
The selection process covered six stages including an initial questionnaire to over 40 providers, a detailed tendering exercise, an examination of back-office operations, an independent assessment, presentations, interviews and references.
The TUC has also commissioned Cap Gemini Ernst and Young (CGEY) to conduct an audit of Prudential’s business proposition and to verify their administrative and systems capabilities. CGEY said “Prudential will make a good partner for the TUC from a technical point of view and everything we have seen leads us to believe that their business is making the necessary manoeuvres to make the relationship [between the TUC and Prudential] work.”
CGEY is one of the world’s largest management and IT consulting companies. It offers management and IT consulting services, systems integration, technology development, design and outsourcing capabilities. CGEY has extensive experience of auditing and assessing the suitability of IT-based administration systems.
Prudential as a stakeholder provider
Prudential is committed to providing a top quality stakeholder scheme.
Rodney Baker-Bates, Chief Executive, Group Pensions, Prudential plc, said: “Stakeholder pensions represent a major change in the pensions market in this country. As Britain’s leading provider of pensions, Prudential intends to be at the forefront of the Stakeholder pensions market.
“Prudential’s stakeholder pensions will bring together the two strongest attributes of Prudential’s business – our long experience in delivering quality financial products with our position as one of Britain’s most innovative providers of financial services using the new opportunities presented by the technology and media revolution.
“We will use on-line channels to provide information about our products and to enable customers to buy and manage their stakeholder pension products. Our whole approach is based on ensuring that those pensions will be straightforward and easy to access.”