Welcome to our report which covers matters to 31st December 2020 but also looks forward to the work we’ll undertake in the future following changes announced by the Financial Conduct Authority (FCA).
At the time of writing, we are all still living through the pandemic. The period covered by our report has been extraordinarily challenging for all, including pension providers, but nonetheless there are positive developments and experiences to report. The pandemic neither lessens our scrutiny on “value for money” nor Aviva’s efforts to provide it. In some areas there inevitably has been some impact which we cover further in the following pages.
I am pleased to note that Aviva has made great efforts since our last report to keep your workplace pensions running as smoothly as possible. Investment fund values have held up very well to this point through the volatility caused by the pandemic and other external events. Whilst everyone has had much to deal with in life over the last 16 months it is important to know that your pension with Aviva is being well invested and managed and that the Company is there in support. Aviva has been strong in this regard.
Our sections on “value for money” and “service and administration” highlight the continuity and support Aviva has provided and the strength of their teams during the pandemic. The investment sections highlight how the funds have fared with generally positive performance in 2020. Many investment markets, but not all (such as the UK equity market), showed overall positive performance in 2020. We note that the Aviva main default funds achieved results which compare well with other similar funds.
We have seen further integration of Environmental, Social and Governance (ESG) factors into Aviva’s default funds and market leading ESG developments in other areas. The IGC and Aviva both consider this to be of major importance to manage financial risk from climate change, and to enhance investment performance through the ESG credentials of the underlying investments in the funds. Aviva’s commitments in this area are ambitious and we will continue to monitor their progress and actions.
All of our meetings over the last 16 months have been virtual. This has not interrupted our schedule, the subject matters we cover or our interaction with Aviva. In fact, we have had substantially more discussions with Aviva to ensure we have been kept fully updated on the impact of the pandemic on their business activities. We have assessed all areas contained in our Business Plan using a Value for Money framework which this year has been adapted to include a stronger ESG assessment and includes our initial assessment of Investment Pathways both of which are detailed later in this report.
There has been further progress on reductions for the relatively small number of you with what may be viewed as high charges. We remain in debate with Aviva about the potential for any further reductions and await further guidance or requirements from the FCA on Value for Money.
There have been material developments in the engagement options available to you when you wish to review your pension or consider any pension decisions. More of you can access pension projection tools and the information and facilities on-line are more substantial. Some planned additional features were delayed slightly due to prioritisation of resources towards ongoing services through the pandemic, but the more important elements still progressed.
We encourage you to use the facilities provided by Aviva such as “MyAviva” where you can log in, manage your pension and assess the retirement benefits you may receive. There is also a wealth of useful information on MyAviva and the MyAviva app can also be downloaded. If you provide Aviva with your email address, it makes it easier for Aviva to contact you to provide further helpful pension information and ideas. This has been particularly useful during the pandemic as they have used email campaigns to update you with important news and guidance. Aviva also run seminars on topics relevant to you at specific points in your journey to retirement. If you have questions relating to your pension do not hesitate to use these communication channels to ask them!
Our main message in this report is that most of you receive good or very good value for money. Rightly, Aviva prioritised support to you with largely unbroken service and telephone support and appropriate supporting communications during the pandemic. They continued to develop the default investment funds which are the bedrock of future pension savings for most of you.
Everyone hopes we move closer to more normal times. In the meantime, we will continue to assess improvements to the value you receive in the next year. Should you wish to get in touch with us, you can do so by emailing IGC@Aviva.com – we welcome any feedback or questions you might have.
Colin Richardson
Independent Chair – Aviva IGC