DC STREAM. The Guidance Guarantee. How, what, when and how much? Speakers Maggie Craig Warburtons and DC Council Member.

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1 DC STREAM The Guidance Guarantee. How, what, when and how much? Speakers Maggie Craig Anne Hunt FCA Warburtons and DC Council Member Chair Jerry Gandhi DC Council Sponsored by: Live voting session Media partner:

2 Live voting final results 1. To what extent are you ready to manage your obligations in the new post Guidance Guarantee regime? 51% 3% 46% 1. Already planning to improve support to members in addition to any new requirements 2. Will wait to see before we plan how we support in addition to any new requirements 3. Will only do what is required Live voting session

3 Live voting final results 2. How much will you plan (or be prepared) to spend to support members with guidance when the new flexibility is available (leading up to or at retirement)? 1. We will only do what we are required to do 23% 24% 53% 2. Happy to provide support up to per member (generic support etc.) 3. We would plan to improve engagement and may spend more than 150 per member Live voting session

4 DC STREAM The Guidance Guarantee Maggie Craig Acting Head of Savings, Investment and Distribution Financial Conduct Authority Sponsored by: Live voting session Media partner:

5 Agenda Budget changes are a game changer The Guidance Guarantee What have we been doing and where are we at? What does this mean for pension schemes? Other issues and next steps

6 Budget changes are a game changer What will people do with their pot? Alternative products will develop More complex decisions, but not for all People will need help to make the right decision at retirement

7 Engagement Engagement A new way of thinking Time Time

8 The Guidance Guarantee Treasury s key strategic decisions: Service design and implementation of the guidance service Designating the organisations that will deliver the guidance FCA role: Set, maintain and monitor the standards Collect levy Supervise providers and the interface with Guidance Guarantee

9 The Guidance Guarantee (cont.) Designed to help people make the most of their pension savings Not designed to be financial advice Provided through a variety of delivery channels Relevant personalisation but ultimately individual choice

10 What have we been doing and where are we at? Consultation paper covering (closed 22 Sept.): Standards for delivery partners Proposed rule changes for firms signpost Levy proposals 150 responses policy statement in late autumn Working with the Treasury and DWP on legislation

11 What does this mean for pension schemes? Requirement to signpost to the guidance Interaction with existing retirement communications

12 Other issues and next steps FCA policy statement late autumn Guidance Service April 2015 Pension reforms and challenges for April 2015 Regulatory focus on charges and governance

13 DC STREAM The Guidance Guarantee. How, what, when and how much? Anne Hunt Warburtons Limited Sponsored by: Live voting session Media partner:

14 What we re going to cover? Company profile and geographical locations DC Plan Membership/Investment Profile Engagement Project Team Engagement Plan and Priorities Pensions Talk Engagement Roadmap Fidelity Retirement Services Guidance Guarantee What is the impact and cost Q&As over to you

15 Company Profile Established in 1876 by George, Thomas and Ellen Warburton from a tiny bakers in Bolton After 138 years, the Company is still a privately family owned business actively managed by the fifth generation since 1991: Jonathan, Ross and Brett The largest family owned bakery in the UK, employing 4500 people at 12 bakeries and 15 depots across the UK Now recognised as Britain s favourite baker, having double in size in the last decade with a turnover in excess of 500 million a year As the UK s number one bakery brand, a quarter of all bakery products consumed in the UK comes from Warburtons

16 Geographical Locations 12 Bakeries 15 Depots

17 DC Plan Membership Profile to Selected Retirement Age

18 DC Plan Investment Profile

19 Engagement Project Team

20 Year 1 Year 2 Year 3 Engagement Plan 2014/15 Launch Engagement Campaign Refresh existing materials Move Pensions Talk publication to November Promote PlanViewer Create PlanViewer user Guide Set measures of engagement 2015/16 Investment review/relaunch Refresh/review Plan booklets for Budget and investment changes Promote benefit statements Focus on Retirement and Joining processes Develop interactive learning sessions (segmented in line with Roadmap) Recruit/refresh pension champions, scope role and train 2016/17 Contribution campaign (trailing auto enrolment increases) Refine/review interactive learning sessions Review annual benefit statements Review use of PlanViewer Review effectiveness of pension champions Promote new tools

21 Engagement Priorities What next? Refreshing our existing member communications Welcome to Warburtons Pensions booklet to be updated Main Focus on joining and retirement process Welcome letter auto enrolment Step by step guide to Retirement Explore your options interactive pdf Presentations at sites DVD or mobile app

22 Pensions Talk

23 Engagement Roadmap

24 Fidelity Retirement Services Wake up letter 5 years before selected retirement age Letter 2 years before selected retirement age Letter 6 months before selected retirement age Annuity Purchase Open Market Option Income Drawdown Cash Fidelity Retirement Services team of specialists Access to advice and website Non advised Advised

25 Schemes/Employer Guidance Guarantee what is the impact and cost? Tight deadline for finalisation and implementation Rewriting existing communications due to signposting requirements Communicate changes to members Training and development of in-house teams Resources for implementation and on-going support Potential cost 100k

26 Schemes/Employer Pension Providers Guidance Guarantee what is the impact and cost? Tight deadline for finalisation and implementation Rewriting existing communications due to signposting requirements Communicate changes to members Training and development of in-house teams Resources for implementation and on-going support Potential cost 100k Tight deadline for finalisation and implementation Rewriting existing communications due to signposting requirements Compliance with additional disclosure requirements Potential impact on fund charges due to additional costs Resources for implementation and on-going support Potential cost 1.5m

27 Guidance Guarantee Scheme/ Employer Membe r Provider Guidance Guarantee IFA

28 Guidance Guarantee Scheme/ Employer Membe r Provider Member Guidance Guarantee IFA

29 Live voting final results 3. Do you think members will make a decision based on the Guidance and decide not to take independent financial advice? 11% 18% 71% Yes No Unsure Live voting session

30 Live voting final results 4. Who do you think members will contact first for Guidance? 0% 1. Scheme/Employer 6% 12% 2. Plan Provider 3. Guidance Partner 82% 4. An Independent Financial Advisor Live voting session

31 Live voting final results 5. Do you think the guidance will lead to a better member outcome? 24% 41% Yes No Unsure 35% Live voting session

32 Live voting final results 6. Is there a risk that the Guidance could potentially be the next mis selling? 13% 20% 67% Yes No Unsure Live voting session

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