Employers
and other pension providers could face a PR disaster, following new government
regulations out next week.
From
6 April, members of money purchase schemes must be given individual statements
showing how much, or little, pension they will get on retirement. The
projections could come as a shock to many.
"The
projections will not make for attractive reading in many cases. They could
create a lot of confusion among members," said Nick Throp, european
partner at Mercer Human Resource Consulting.
Up
to now, most members’ annual pension statements have only shown the value of
their pension funds. In future, members will also receive a projection of the
annual pension that their individual fund might buy. The illustration will be
in ‘real terms’, allowing for inflation and directly comparable with today’s prices.
The new figures may be considerably lower than members’ expectations.
"Despite
the current turmoil in pensions, many people are still in denial about what it
all means to them. The new personal statements are bound to remove some of the
current complacency," Throp said.
