Royal London to publish first report of Independent Governance Committee
03 March 2016
Royal London, the largest mutual life, pensions and investment company in the UK, today publishes the first report of its Independent Governance Committee (IGC).
The Royal London IGC was formed in April 2015, with the majority of members independent of Royal London (see Notes to editors for details), to oversee the governance of the workplace pension schemes administered by Royal London. All providers of workplace pensions that do not have a Board of Trustees are required to have an Independent Governance Committee distinct from the provider. Royal London is among the first providers to make its IGC report public.
Speaking today Phil Green, Chair of the Royal London IGC, said:
“I am very pleased that Royal London has taken such a positive approach to the findings of my Committee. The company has assisted us throughout the process, making the complex task of weighing-up the value for money offered to members by Royal London’s book of workplace pensions a lot easier.
“ They have given us access to detailed management information and the Committee has been able to review the comments of actual customers as part of the evaluation. This has enabled us to consider the benefits and quality of the workplace pensions provided, not just their costs.
“We believe that Royal London offers a high quality proposition but we do have a few recommendations based on our analysis of the value for money provided. These proposals mainly impact legacy scheme members who should benefit from improved terms to their pension policies in the near future. Royal London has agreed to act quickly to implement our recommendations and it is estimated that the cost of the changes proposed and agreed will be over £15 million. This represents a reduction of the charges on the affected workplace pensions of over 20%.
“In summary the changes are:
- the removal of a policy fee on certain legacy workplace pensions that are no longer receiving
contributions. This is of particular benefit to customers with smaller pension fund values.
- the removal of the exit charges that apply when a customer moves their pension from Royal London in certain legacy contracts.
- increasing the overall level of fairness in some of the more complex charging structures.
- improving how the loyalty bonus structure works on some legacy products.
“The changes are expected to benefit over 27,000 workplace pension members.
“The Committee does not see this first review as a one-off exercise and we expect continually to challenge Royal London to evaluate and improve its workplace pensions.”
Commenting on the IGC report, Royal London’s Director of Policy, Steve Webb said:
“We welcome this first report of the Royal London IGC and are grateful to the Committee for its thorough work. We are pleased that the Committee found that the vast majority of Royal London customers were getting value for money from their workplace pensions. This is particularly important to us because as a mutual our first priority is securing the best outcomes for our members – the people who own our business. We will take action where it has been identified so that the terms of these minority of policies, set up some years ago, are updated as soon as possible.
“We firmly believe it is vital that we offer our workplace pension members all-round good value for money. Many members of our workplace pension schemes are also mutual members of Royal London and so will benefit from the Profit Share arrangement that we announced last year.
“Royal London was already reviewing the value for money of our existing workplace pensions before the IGC was set up. The Royal London IGC brings objectivity and a ”fresh pair of eyes” to this work.”
Full details of the recommendations and the timeframe for their implementation are outlined in the Royal London IGC Report By following this link www.royallondon.com/IGCReport
Customers looking for details of the implications of the Royal London IGC findings are able to view more details on the Royal London website (www.royallondon.com) from 3rd March.
- ENDS -
For further information please contact:
0207 506 6715
0207 506 6740
Notes to editors:
- The Royal London IGC was established in April 2015. The current members are:
Phil Green, Independent Chair
David Gulland, Independent Member
Peter Dorward, Independent Member
Isobel Langton, CEO, Royal London Intermediary
Jon Macdonald, Chief Risk Officer, Royal London
- As at 31st December Royal London had 17,399 workplace pension schemes (an increase of 21% on 1st April 2015. This represented 576,900 workplace pension members (an increase of 23% on 1st April 2015).
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £84.5 billion. Group businesses provide around 9.1 million policies and employ 2,988 people. (Figures quoted are as at 31 December 2015).