It is a key requirement of the FCA for pension switching cases that you conduct a comparison of the costs and charges of the ceding and new plan on a like-for-like basis (taking account of all costs & charges). 


This can be achieved by including a projection of benefits or reduction in yield comparison within your suitability report. We believe a reduction in yield comparison is the best solution for the reasons set out in this blog, hence why a reduction in yield comparison is included as standard within the Plan Comparison steps in Genovo.


However, we do appreciate that not everyone wants to adopt this approach, so we've created a solution that will enable our users to customise their account so a projected fund comparison is included instead of, or as well as, a reduction in yield comparison in their reports. 


So here are some easy-to-follow instructions that walk you through how you can customise your report template to reflect the output of two of the most popular providers of pension analysis software - O&M Systems and SelectaPension.   


1. Go to Customisation > Report content manager.


2. Select Suitability Report from the 'Report Type' drop down, and Appendix - Plan Comparison from the 'Section' drop down menu. The page will refresh and the snippets that make up that section will be displayed underneath.



3. Click the edit icon for the Projected Pension Fund Comparison snippet. By default, this is a blank snippet which is automatically triggered whenever a pension switch related Recommended Action is selected in the Review of Your Existing Pension Plans or Review of Your  Retirement Income Plans sections.



4. This will open a new window. Click Create custom version of snippet to create your own custom version of this snippet.


 

5. Yet another window will open where you can add the wording and a table to reflect your preferred content.


The next steps walk you through how to add a projection of benefits template table (and the surrounding wording) to this snippet in line with the standard output provided by O&M and SelectaPension. However, you may wish to adapt the wording and / or table to reflect your own requirements. 


6. Next, click the 'code view' button in the editor toolbar.



As a result, the tool bar of the editor will change and become greyed out.


 

7. Select and copy the html code (coloured blue) below relating to O&M or SelectaPension as per your preference, and paste it into the empty text box.



O&M Systems


<h2>Projected Fund Comparison and Critical Yield</h2>
<p>It is not always easy to compare charges on a like-for-like basis. The table below compares the projected fund you could receive from your existing and the recommended alternative plans at age *INSERT AGE*&nbsp;assuming the highlighted growth rates. Although the comparison takes account of any penalties and charges applied as a result of the switch, it does not take account of the relative investment performance of the existing and proposed alternative plans.</p>
<table border="1" cellpadding="1" cellspacing="1" style="width:100%;">
<tbody>
<tr>
<th style="width:55%">Assumed Growth Rates</th>
<th style="width:15%">*INSERT*%</th>
<th style="width:15%">*INSERT*%</th>
<th style="width:15%">*INSERT*%</th>
</tr>
<tr>
<td><strong>Existing Plans Consolidated - Projected Fund</strong></td>
<td><strong>&pound;</strong></td>
<td><strong>&pound;</strong></td>
<td><strong>&pound;</strong></td>
</tr>
<tr>
<td>Equates to an ongoing annual charge of:</td>
<td>%</td>
<td>%</td>
<td>%</td>
</tr>
<tr>
<th>&nbsp;</th>
<th>&nbsp;</th>
<th>&nbsp;</th>
<th>&nbsp;</th>
</tr>
<tr>
<td><strong>Recommended Alternative Plan - Projected Fund</strong></td>
<td><strong>&pound;</strong></td>
<td><strong>&pound;</strong></td>
<td><strong>&pound;</strong></td>
</tr>
<tr>
<td>Compared with your existing plans, the recommended alternative would change your fund by:</td>
<td>%</td>
<td>%</td>
<td>%</td>
</tr>
<tr>
<th>&nbsp;</th>
<th>&nbsp;</th>
<th>&nbsp;</th>
<th>&nbsp;</th>
</tr>         

<tr>
<td>Critical Yield</td>
<td>%</td>
<td>%</td>
<td>%</td>
 </tr>

<tr>
<td>Additional Annual Growth Required</td>
<td>%</td>
<td>%</td>
<td>%</td>
</tr>
</tbody>
</table>
<p>The table also shows the annual rate of growth <i>(critical yield)</i> that the recommended alternative plan must achieve in order to provide a fund at least as good as that offered by your existing plans at the end of the assumed investment term. If the critical yield is lower than its corresponding <i>assumed growth rate</i> this indicates that an equal fund could still be produced even if the actual annual growth rate achieved by the alternative plan is lower than your existing plans, and vice versa. The <i>additional annual growth rate</i> indicates the annual investment growth that is required, in addition to the <i>assumed growth rate</i>, to match the projected fund value of the existing plans.</p>


SelectaPension


<h2>Projected Fund Comparison</h2>
<p>It is not always easy to compare charges on a like-for-like basis. The table below compares the projected fund you could receive from your existing plan and the recommended alternative at age *INSERT AGE*&nbsp;assuming the highlighted growth rates. Although the comparison takes account of any penalties and charges applied as a result of the switch, it does not take account of the relative investment performance of the existing and proposed alternative plans.</p>
<table border="1" cellpadding="1" cellspacing="1" style="width:100%;">
<tbody>
<tr>
<th style="width:55%">Assumed Growth Rate</th>
<th style="width:15%">*INSERT*%</th>
<th style="width:15%">*INSERT*%</th>
<th style="width:15%">*INSERT*%</th>
</tr>
<tr>
<th>Existing Plans - Projected Fund</th>
            <td>
<strong>&pound;</strong></td>
            <td>
<strong>&pound;</strong></td>
            <td>
<strong>&pound;</strong></td>
</tr>
<tr>
<th>&nbsp;</th>
<th>&nbsp;</th>
<th>&nbsp;</th>
<th>&nbsp;</th>
</tr>
<tr>
<th><strong>Recommended Alternative Plan - Projected Fund</strong></th>
<td><strong>&pound;</strong></td>
<td><strong>&pound;</strong></td>
<td><strong>&pound;</strong></td>
</tr>
<tr>
<th>Rate of Return Required From Recommended Alternative to Match Existing</th>
<td>%</td>
<td>%</td>
<td>%</td>
</tr>
<tr>
<th>Effect this will have on fund if moved to Recommend Alternative</th>
<td>%</td>
<td>%</td>
<td>%</td>
</tr>
<tr>
<th>Reduction in Yield if moved to Recommended Alternative</th>
<td>%</td>
<td>%</td>
<td>%</td>
</tr>
</tbody>
</table>


8. Finally, click on the preview icon to view the content in the format it will come out in your reports, make any changes as you require, and click Save. Close down the window and that's it you're done!



In terms of the report output, the content of this snippet will now be automatically inserted within the Appendix - Plan Comparison section of your reports whenever a pension switch related Recommended Action is selected in the Review of Your Existing Pension Plans or Review of Your  Retirement Income Plans sections.

 

In terms of the Projected Fund Comparison table you will need to manually insert the assumed growth rates, projected fund values etc for the existing and recommended alternative plans once you've downloaded the report to Word.