How to switch to a net zero pension (and why it’s easier than you think)

Last month we covered the net zero pension pots and why corporates can’t afford to ignore it. Businesses with an ESG focus are a force for good in the world. They care about our planet and take steps to minimise their carbon footprint. But we know that employers are often nervous about moving their pension scheme. So this time, we’ll talk about how easy it is to switch to an environmentally friendly net zero pension.

It’s new era for pension funds, but we understand if you’re nervous

Let’s be realistic about this. Moving your pension scheme isn’t something you idly decide to do on a whim one slow-moving Tuesday afternoon after reading online financial advice. It’s a governance issue with significant ramifications for your workforce. We recommend that you sit down with leadership and employee representatives every six months, find out their priorities, and if sustainability keeps coming up, it’s time to make the move.

While we are big fans of Cushon and recommend it, you’ll want to review your current pension provider first. Compare their offering with all the available alternatives. Assess price, service levels and quality of reporting output. Evaluate any utilities, like online assistance or apps, and weigh the benefits of other requirements like ESG/carbon-neutral goals.

Why are businesses afraid of switching pensions?

Without a doubt, safeguarding your employees’ pension plans is a weighty responsibility. Money is a very emotional thing, and pension savings represent a person’s hopes and dreams for the future.

Perhaps the biggest block is that people mistakenly think moving to a net zero scheme won’t give such high returns, so it’s not surprising that many business leaders are hesitant to make the switch. But when you look at how ESG investments are performing, and the kind of returns that Cushon are seeing, sustainability is actually outperforming the alternative.

Your existing workforce and the talent you need to attract don’t want pension pots that are contributing to the climate crisis. And in the face of the Great Resignation and an increasingly competitive hiring market, employers ignore this issue at their peril. One in four workers intend to change jobs, and many potential employees place great value on sustainability issues. So, to find and keep the best employees, you need to get your pension provider right.

Is switching a workplace pension scheme safe?

We’ve all heard horror stories of investors losing their savings due to transferring their pension provider. However, to put this in perspective, disasters of that nature are primarily due to the use of unregulated, high-risk investments or overseas providers and funds.

To ensure your pension transfer is safe, simply employ the services of a regulated financial adviser. A reputable pensions expert will steer you clear of sketchy and potentially fraudulent high-risk/high-gain plans. Any recommendations will be for properly regulated providers with satisfactory protection and capital adequacy. And one more thing to note:, an accredited, regulated financial adviser won’t hold your money or funds – any transfers are made electronically from provider to provider.

The switch to a net zero pension is easier than you think

Here at Amba, we have our own resident pensions expert, who can support you every step of the way if you choose to prioritise ESG in your pension investments. They can talk with your employees about their financial health too.

You can start a new workplace pension scheme and easily stop the previous one. Members can either transfer their residual funds over to the new pension scheme provider or choose to leave them where they are. Oue pensions expert will provide you with all the guidance you need and, in conjunction with a recommended provider, can deliver training to HR and Payroll on how to upload information and payments.

Our pensions expert can provide workplace pension presentations either as group sessions or individual one-to-one meetings. So, if you want to learn more, don’t hesitate to get in touch.

And before we forget to mention, if you want to make this easier for yourself, you should take a look at our benefits platform. With Lumina Perks, employees can opt-in for a net-zero Cushon pension, while with Lumina Gateway and Plus, you have the option to make a Cushon net-zero pension the default provider for your entire organisation.

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