16 July 2004 - Publication of DWP research report no. 212: combined pension forecasts: a report on the experiences and views of CPF providers and recipients
Research published today by the Department for Work and Pensions explores experiences of those participating in the Government’s Combined Pension Forecasting (CPF) initiative. CPFs are a particularly helpful tool because they provide pension scheme members with state pension forecast information combined with a forecast of an individual’s current occupational or private pension.
As part of the Informed Choice strategy, this gives people personalised information to make them more aware of their financial situation in retirement and help them to plan accordingly.
The report presents findings based on case studies with 36 different CPF providers; these were mainly relatively large employers and some pension administrators, and also 110 of their employees who received a CPF. The research was carried out on behalf of the Department for Work and Pensions by IFF Research.
The main findings from this qualitative research are:
Key findings – on those who provide CPFs to their pension scheme members.
- All CPF providers interviewed stated they felt their involvement with the CPF scheme had been worthwhile. They thought that sending out CPFs had helped (or should help) to raise staff awareness of their likely financial position in retirement and would provide them with more information on retirement planning.
- All those who had sent out CPFs anticipated that they would continue their involvement with the scheme in future, although one or two added the caveat that this would be dependent on not receiving a dramatic increase in the number of employees ‘opting out’ of the scheme in subsequent years.
- All those who had issued CPFs, and the majority of those working towards it, said they would recommend the scheme to other similar employers / providers. However, this research was carried out with relatively large organisations with in-house IT support facilities. It was felt the administration process may be more problematic for smaller employers who do not have these resources.
- Some providers had only included members of one of their pension schemes in the first year of their involvement with CPF but most of these anticipated that they would extend their participation to include their other schemes next year.
Motivations and barriers
In terms of motivations for participation in the CPF scheme, providers tended to see benefits for their employees rather than for themselves as employers. The main area where they encountered problems with the scheme was in exchanging test data (a procedure employers had to complete before receiving state pension forecast data). However, recent IT improvements have been implemented to tackle these problems.
Key Findings – on employees who received a CPF
- Most employees welcomed their employers’ participation in the CPF scheme. They felt it had helped to give them the ‘overall picture’ and acted as a useful prompt to at least consider the options available to them for increasing retirement savings. In the words of research participants,
“It gives you the bigger picture, so you can see the whole and what this means to you and it gives you a chance to do more.”
“It brought home to me what I will have to retire on and that I need to take action now.”
“It gives everyone a kick start to sort out their finances for their retirement – it really makes people sit up and take notice.”
- Nearly all employees could recall receiving their state pension forecast when asked directly. The majority of individuals found the CPF very or fairly easy to understand.
Notes for editors
- "Combined Pension Forecasts: A report on the experiences and views of CPF providers and recipients" by Karen Bunt, Lorna Adams and Catherine Mottram, DWP Research Report Series (no 212) is published on 16th July 2004 by Corporate Document Services, priced £30. The report and summary are available free on the DWP website: www.dwp.gov.uk/asd
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