In response to the FCA’s consultation on Retirement reforms and the Guidance Guarantee, the National Association of Pension Funds (NAPF) has welcomed the opportunity to help shape the template for directing consumers to the Guidance Service. The NAPF also stressed it is critical this work finishes in October 2014 if a standardised wording and branding is to be agreed in time for schemes to use in their member communications ahead of April 2015.
Commenting, Jackie Wells, Head of Policy and Research, NAPF, said:
“Finding a way to direct pension scheme members to the guidance service, and in a way that they can use it to make an informed decision, will take effort and ingenuity.
"We have repeatedly highlighted the pressure the short timescale for delivering the Government’s pensions reforms is putting on pension schemes. The NAPF and its members are ready to work with the Government, FCA and other industry bodies to develop the template for the guidance signposting so that it works for pension savers, and schemes have enough time to understand their responsibilities and make necessary changes. Mistakes or delays will be detrimental to schemes and savers. We ask the Government and FCA to ensure pension schemes are able to promote the guidance service effectively to scheme members.”
The NAPF’s response also points out that for some large pension schemes the cost of repeated signposting could be in excess of £100,000 a year. The NAPF urges both the DWP and FCA to consider ways to deliver the service in a way that maintains pension savers’ interest and awareness but also keep costs at a realistic level.
Jackie Wells said:
“Whilst the NAPF supports the principles of making sure pension savers are signposted to the Guidance Service, it is equally important that this is done at the most pertinent point so that scheme members do not ‘switch off’. Approaching this thoughtfully will maintain pension savers’ engagement and will also prevent considerable costs being added to pension schemes. In the case of the largest schemes this could be in excess of £100,000 a year – and will have to be cross-subsidised by scheme members.
“We want to see the Guidance Service succeed and so we are calling for some consideration of how schemes can realistically and pragmatically signpost the guidance service to best serve members’ needs.”
Standards for delivery partners
Jackie Wells commented:
“The standards for the guidance delivery partners are an essential part of helping scheme members make the right decisions in what will be an increasingly complex retirement income landscape, and we are pleased that many of the FCA’s proposals echo the NAPF's own views.
“However, these standards should encompass the spirit of the brave new world of pensions freedom and choice and should not inadvertently exclude or restrict any of the key flexibilities for savers – for example the Guidance Service failing to point out drawdown facilities that trust-based schemes may offer their members.”
NAPF response to the Financial Conduct Authority’s (FCA) CP14/11: Retirement reforms and the Guidance Guarantee, which closed 22 September 2014.
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