A combined auto-enrolment (AE) and personal pension provider has launched in a bid to provide savers and employers with a seamless, greener and engaging proposition.
Founded by Eduardo Chazan and Riccardo Gasparini – chief executive and chief financial officer respectively – and funded by investments from Oxford University Incubator and private backers, app-based Collegia Pensions is particularly setting its sights on tackling the small pot problem.
The scheme combines AE and personal pension products to create a proposition that is accessible by multiple employers simultaneously, and those with full employment and gig employment incomes.
Collegia also wants to actively work with advisers, both in their capacity as advisers to SME schemes, and as advisers to individuals – especially on advice for small pot consolidation, which is currently mostly execution only, a spokesman said.
The scheme is regulated and approved by both the Financial Conduct Authority and HM Revenue & Customs.
Speaking to RP’s sister title Professional Pensions, Chazan explained that Collegia wants to both improve understanding and emotion of pensions.
“The thing that became a magnet for us was the negative emotion associated with pensions altogether,” he said. “It’s a market that can do so much good, but when you ask someone about a pension, the average attitude people had was a very negative one.
“It was very curious that a market that is so big, a product that stays with you for a very long time, is associated with fear and sometimes even resentment.”
Collegia will try to demonstrate the value of a pension with a three-pillar approach: better for individuals, better for employers, and better for the environment. The aims centre around simplification, ESG, and retirement planning.
“We need to bring the framework of personal pensions; the same framework with the independent governance committees, governance advisory arrangements, senior managers regimes, and treating customers fairly, and bring it to the AE market.
“Crucially, we need to make it a pension that if you come from your employer by AE, if you sign up directly by downloading the app, if you come because you are self-employed, you want to maximise something related to your tax, you can still be in that one single product that will keep with you for a very long time.”
Gasprini expanded: “We call it the modern workforce where you can have multiple jobs, you can have full time and part time and gig economy at the same time. If you don’t have a single account related to your pension, we believe it is not the right approach to retirement, investments, and retirement planning.”
Chazan and Gaspirini hope the malleability of the product, as well as its tailor-made 100% ESG defaults, will prove an enticing offering – as well as the retirement calculator that, with adjustable inputs, will measure a predicted income in retirement against the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards.
Chazan concluded: “The whole idea of Collegia is a flexible, portable, very powerful product with consumer protection rights, putting sustainability front and centre, and actually putting you in control of decisions that can actually be meaningful.”
Collegia has partnered with AllianceBernstein (AB) and Mobius Life for its target-date funds, and members plans are structured as long-term unit-linked insurance policies provided by AB and unitised and administered by Mobius.
Free to employers and payroll providers, members will be levied a 1.7% new contribution charge, and an annual management charge of 0.1% plus fund-level charges of between 29 and 35 basis points, depending on the selection.