The Pensions Management Institute (PMI), the UKs leading professional pensions’ body, has flagged serious concerns about how the freedom and choice changes may impact on schemes and pension savers alike.
The Fellowship Network, the highest professional standing in the PMI, flagged 3 key concerns about the changes; the potential liability of schemes and trustees from not giving scheme members what they expected, the extra administration schemes will face to implement the new flexible options that scheme members will expect to access in full and the poor levels of existing knowledge and understanding of scheme members about their pension options and the distinction between guidance and advice.
Amongst their recommendations to protect members against making poor decisions was the call for employers to offer pre-retirement planning measures and for providers of schemes to educate members sooner – from 10 years before the new access age of 55.
Jonathan Watts-Lay, Director, WEALTH at work- a leading provider of financial education, guidance and advice in the workplace comments, “We really welcome these views for the PMI and absolutely agree that there is a need for more employers and trustees to offer access to professionally delivered financial education in the workplace well before retirement age. In fact, we already work with a number of forward thinking companies to provide pre-retirement education services and the results are clear to see. Our evidence shows that following effective financial education in the workplace, those that attended are likely to take action and get more help and advice.”
He adds, “We already offer full access to the pension flexibilities whilst also offering regulated advice to those that need it. There is no reason why any employer or pension scheme cannot meet the expectations of their members when a service like ours is there and able to help now.”