Big changes are afoot for the Ensign Retirement Plan over 2018 – and Nautilus believes they will deliver long-term benefits for members in the maritime industry…
The Ensign Retirement Plan (ERP) – established in 2015 with the support of Nautilus – is the only pension scheme designed exclusively for employees in the maritime industry, whether shore-based or at sea. Much has altered in the pensions landscape since the Plan was launched, and this year will see further regulatory change under a new Master Trust authorisation regime.
With change comes opportunity. The Plan recently announced some significant improvements so that employers and members continue to get value for money, and to ensure the scheme remains sustainable and meets its overall aim of delivering a decent retirement income and the best possible retirement solutions for those working in the maritime industry. These changes, which come into effect over the course of the 2018/19 scheme year.
Lower member charge, across all fund choices
Whilst already very low, the ERP member annual management charge is being reduced by a further 0.05% across all Plan funds, including the LifePath Funds, from 1 April 2018. This means the Plan’s most popular fund, the LifePath Flexi Fund, will have an annual charge of just 0.31% – one of the lowest available across the pensions industry – providing even better value for money for members and ensuring they receive a cost-effective solution as they plan for retirement.
Added income drawdown facility within the Plan
Until now, in order to access flexible income drawdown, members needed to transfer their retirement pot out of the Plan. The facility to drawdown income from within the Plan, at no additional cost, will be made available within the 2018/19 scheme year. Members remaining within the Plan after retirement and taking income drawdown will enjoy the same exceptionally low annual charge of 0.31%, and continue to benefit from the high quality of governance they have come to expect from the ERP.
A retirement guidance service for members
The ERP’s Trustee is conscious that as members approach and reach retirement, they need help and support as they transition from their working life. As such, Plan members will be offered specific guidance and advice at this crucial time to help them make the most of their retirement savings.
One consolidated Master Trust for the maritime industry
Compliance with regulatory change under the new Master Trust authorisation regime in 2018 will mean significantly increased costs for the ERP and its sister scheme, the Ensign Retirement Plan (for the MNOPF). The latter is the money purchase section of the Merchant Navy Officers Pension Fund (MNOPF).
MNOPF chair Rory Murphy (pictured) commented: ‘The MNOPF is committed to securing decent pensions and retirement outcomes for the current and future generations working in all areas of the maritime industry. That’s why, having reviewed the Plan and considered its financial projections over the coming years including the substantial Master Trust regulatory costs, the Trustee is proposing to consolidate the Ensign Retirement Plan (for the MNOPF) with the Ensign Retirement Plan to make one robust and sustainable defined contribution pension plan.
‘We have the backing of Nautilus International, the Merchant Navy Pensions Employers Group and the Joint Officers Pension Committee, which all support the proposal to merge the two Plans, and agree that doing so is in the best interests of members, employers, and the sustainable future of the ERP,’ he added.
Employers with active members in the Ensign Retirement Plan (for the MNOPF) have been consulted on the proposal. Subject to the conclusions of the consultation exercise and the subsequent considerations of the Trustee, the two plans will be consolidated with effect from 1 April 2018 and the Ensign Retirement Plan (for the MNOPF) will be wound up.
Existing members of the Ensign Retirement Plan (for the MNOPF) will have their retirement pots transferred into the ERP in early May and will be able to enjoy the reduced annual member charge and benefit from the Plan enhancements as these come online throughout the year.
Those members who were actively contributing to the New Section of the MNOPF on 31 March 2016, and who actively contributed to the Ensign Retirement Plan (for the MNOPF), will continue to receive the uplift to their preserved MNOPF benefits and their current contribution levels.
We have the support of Nautilus and the employers' group to merge the two ERP schemes in the best interests of members. Chair of the MNOPF, Rory Murphy
Nautilus general secretary Mark Dickinson, who serves on the ERP board of trustees, commented: ‘With these changes the ERP is demonstrating its determination to maintain a high- quality, low-fee scheme which offers members flexibility and choice. This will keep the Plan at the forefront of defined contribution pension provision in the UK and ensure it remains a quality Master Trust scheme. There really is no reason for the maritime industry not to support the ERP, as it has repeatedly committed to do.’
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