The devil is still in the detail

There are plenty of challenges to think about when you return from your holidays, but nothing today\'s modern adviser can\'t handleWorkers today face the same means testing issues that personal accounts members will do in the future

As we all head off for the chaos of packed airports, motorways and ferries the corporate intermediary can reflect on a half year of significant progress in the face of difficult economic times.

Group pension plans are showing their resilience to a downturn, and are expected to do so as long as unemployment remains low. Furthermore, their biggest long term competitor looks arguably shot below the waterline by the response to a written question in the House from Baroness Hollis. The essentials of what she has uncovered are explained in detail on page 11.

Effectively Baroness Hollis has done us the service of putting numbers to what we already knew, but how shocking those numbers are – an average earner in personal accounts for 10 years will only increase their retirement income by 1 per cent, and somebody on £20,000 a year will only see a 2 per cent boost in income after saving for 20 years.

Surely these figures will shove the means-testing issue right to the centre of the debate. But they should also inform debate on existing workplace pension provision. Workers today face the same means testing issues that personal accounts members will in the future. What these figures show is that low contribution rates and a lacklustre approach to getting staff to sign up to schemes will leave employers with a workforce who are too poor to retire. This is a challenging message for employers and intermediaries, but one they are capable of meeting.

On the healthcare side, research from Mercer points to a shift in the PMI market that could reflect what has happened in pensions over the last decade. The company is predicting a defined contribution future for some employer-sponsored PMI arrangements. As with so many areas of financial services, employers understandably want to remove some of the risk they bear.

Last month also saw the launch of the Group Risk Adviser Forum (GRAF), a six-monthly event hosted by Corporate Adviser to give intermediaries operating in this crucial sector an arena for discussion. Six pages of coverage of the inaugural GRAF meeting are contained in this issue. I am happy to report that the response we have received from intermediaries who attended the event has been universally positive, and we shall be holding another event in January. Thanks also to Norwich Union Healthcare for their support that made the event possible.

It is my aim to make the event open to as many intermediaries that want to participate. Advisers wishing to attend should contact me at the address shown in the column to the left of these words nearer the event.

Advisers jetting off for a well-earned rest can relax into their sun-loungers knowing that the environment in which they work may be constantly changing, but not in a way that they cannot turn to their advantage.