The submission makes clear the NAPF’s full support of the Government’s decision to provide savers with freedom and choice in pensions but highlights that delivering the proposals before April 2015 will require a huge effort, in a very short time, from the entire pensions sector.
Key to all of this is a clear structure and plan for delivery which does not require the consultation to have been completed before it can be mapped out and put in place.
The NAPF stresses that the purpose of the changes outlined in the 2014 Budget must be to promote and protect members’ interests, and to achieve this the NAPF’ submission emphasises three areas on which the Government should focus on: ensuring that appropriate new retirement income products are available; ensuring the ‘guidance guarantee’ is designed, tested and ready for scheme members in April 2015; and ensuring pension schemes can proceed with the redesign of investment, communication and support strategies that address the Budget proposals and also the DWP’s charge cap.
The question of whether members should continue to be allowed to move from defined benefit to defined contribution schemes was raised in the Government’s consultation. The NAPF’s recommendation is the right for deferred members to transfer from defined benefit to defined contribution schemes should be retained, on the same terms, as long as individuals receive advice.
Joanne Segars, Chief Executive, NAPF, said:
“We fully support the Government’s aims to create freedom and choice in pensions – but this idea has yet to be turned into reality. It’s the pensions industry that will do the heavy lifting in this reform and by failing to focus on the practicalities and put a plan and structure in place for delivery, the Government places the success of the reforms and savers’ interests at risk.
“The Government has instigated a number of reforms across the pensions industry. We support all of them but ask the Government to ensure the implementation of these reforms, including the charge cap, is co-ordinated to allow pension schemes to make all the necessary changes with minimum disruption or detriment to their members."
