The National Association of Pension Funds (NAPF) has issued a Call for Expressions of Interest (EOI) on the provision of at-retirement services for those saving in Defined Contribution (DC) pension schemes.
The NAPF is interested in working with advisers, brokers, and other parties active in the at-retirement market to develop solutions to help more trustees and employers appoint advice and brokering services and secure a good deal for their scheme members.
Anyone wishing to register their interest in participating in the EOI process should do so by writing to CallforEOI_Retirement@napf.co.uk by 10am on 9 August, stating the name of the applicant, and the primary contact name and details to which correspondence in respect of the process should be sent.
The EOI documentation will be sent to applicants on that date, subject to them signing a confidentiality agreement. Applicants will be given three and a half weeks to develop and submit responses to the EOI, and the deadline will be 5pm on Tuesday 3 September.
The EOI exercise follows the publication of an NAPF report on 25 June (Supporting DC savers at retirement: an analysis of the advice and brokerage market). The report highlighted a number of barriers that may prevent trustees and employers from appointing advice and brokering services.
The NAPF is now looking to develop support for employers and trustees to help them put these services in place, so that they can help those saving in DC pension schemes with the difficult, one-off decisions they need to make at retirement around annuities and income drawdown.
Joanne Segars, Chief Executive, NAPF, said:
“Too many savers are failing to make the right choices or convert their pension pot into the best deal possible when they reach retirement. While things are slowly improving, people need more support.
“Our aim is to act as an independent source to tackle some of the market barriers and take some of the hassle out of finding the right adviser or broker. This is an exciting project for the NAPF and we are looking forward to hearing from the wider pensions and advisor industry to see how we can take things forward.
“Auto-enrolment is on course to bring up to nine million people and one million employers into pension saving. It is fantastic and important that so many are coming into pensions, but we need to look at what happens when they stop saving and want to retire.”
The following models of support are under consideration:
• a ‘quality mark’ scheme that would assess advisers and brokers against a set of minimum quality standards that have yet to be determined. Any service meeting the standard would be accredited by the NAPF, or an appointed body, and added to a shortlist.
• a limited ‘panel’ of adviser or broker services with the selection based on a rigorous assessment process. This could simplify processes and reduce costs for those running DC pensions, and provide assurance that due diligence had been applied to the panel member selection. Other services could be included, such as educating the workforce about options at retirement.
• alternative propositions, for example the potential for insurer-sponsored solutions that could provide more universal access to advice and brokering services to parts of the market that may currently be considered uneconomic to serve.
The EOI exercise is the first exploratory phase in the potential development of an NAPF service proposition in this area. Assuming a positive outcome from the EOI exercise, a formal request for proposal (RfP) stage is expected to follow with a smaller number of short-listed parties. The NAPF is being supported in the development of a new service proposition by its legal advisers Macfarlanes LLP.
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