BT Pension Scheme Management (BTPSM), the executive arm of the UK’s largest private sector pension scheme, has acquired a majority stake in Procentia, a market-leading pensions software company, for an undisclosed sum.
BTPSM has also announced that it will be implementing Procentia’s IntelliPen system for the scheme’s member administration services, which it brought in-house last year.
Morten Nilsson, chief executive officer of BTPSM, said: “In Procentia, not only have we found a market-leading system that will future proof our member services, but a great long-term investment in its own right.”
The BT Pension Scheme has around 300,000 members of which 200,000 are pensioners or beneficiaries. It has approximatly £50bn (€59.8bn) in total assets and pays out more than £2.5bn in pensions and other benefits every year.
Established in 2002, Procentia has more than 30 clients, including many household names and FTSE100 companies, which it serves from offices in Bristol in the UK and Chicago in the US. More than two million pension scheme members are administered on Procentia’s systems. It also supplies software to third party administrators, systems integrators, technology companies and other product providers.
Procentia’s founders Steven Donkin, Trevor Scurr, Ian Dowler, Paul Jones and Daniel Osicka will remain with the business.
PPF confirms levy rules for 2020/21
The UK’s Pension Protection Fund (PPF) has announced that levy rules for 2020/21, the final year in the current three-year levy cycle, will remain stable and broadly unchanged from the previous levy year.
The announcement follows a six-week consultation which invited PPF levy payers and industry stakeholders to comment on the proposed 2020/21 levy rules.
The policy statement, which is published on the PPF website, highlights key findings from the consultation and confirms that the levy estimate for the next levy year will be £620m (€741.6m).
Smart Pension to provide services for Guernsey scheme
Workplace pension savings and investments technology provider Smart Pension will operate the States of Guernsey’s Your Island Pension Scheme which will see all Guernsey employees automatically enrolled for the first time.
Legislation is expected to be ratified by the States of Guernsey parliament in 2020.
Michelle Le Clerc, president of the States of Guernsey Committee for Employment and Social Security, said: “Throughout the tender process Smart [Pension] impressed us with their cutting edge technology and a ‘can-do’ attitude.”
She added that the scheme “will change the pension landscape in Guernsey, ensuring every islander has access to a product which is affordable but doesn’t compromise on service standards.”
Andrew Evans, co-founder and cheif executive officer of Smart Pension, said: “The introduction of auto enrolment in the UK has transformed the retirement savings culture for workers and undoubtedly it will have the same impact in Guernsey.”
He added: “The fact that employees will make contributions from their very first pound of earnings shows the commitment that the States of Guernsey has to deliver a better retirement outcome for their residents. This element will undoubtedly be closely observed by the UK government as it evolves.”
Your Island scheme details
Although very similar to auto-enrolment in the UK, Your Island Pension will be a single private scheme, overseen by the State’s Committee for Employment and Social Security, more like the UK’s government-funded NEST.
Under the new secondary pension legislation, employees will have the ability to opt out, and like the UK, there will be an obligation on the employer to re-enrol employees every three years. At that point the employee is, again, able to opt out.
Employers will be required to contribute at a minimum level into the State’s secondary pension scheme, or a private qualifying scheme. Contributions will start at 1% and increase to 3.5% over a nine-year period so that by 2030, all employers will be required to contribute 3.5%.
Employees will also start by paying in 1% increasing to 6.5% over the nine years.
Those who already pay into a private pension or Retirement Annuity Trust Scheme (RATS) will not be required to pay into a new scheme as well, provided that the private pension or RATS meets the qualification criteria.
The scheme is expected to launch in the first quarter of 2022.