Aegon has hit out at the Pensions and Lifetime Savings Association’s plan for a kitemark for retirement savings products, arguing the FCA should be the body that sets a consistent standard across the entire industry.
The PLSA says its consultation on extending the Pension Quality Mark concept to the decumulation space has received widespread support for the role a RQM could play in helping savers secure a good retirement income and trustees to support pension scheme members.
The PLSA says responses believe a RQM would build on current guidance and act as an enabling tool to help consumers make informed decisions and signal products that had met an independent quality standard in relation to governance and communications.
Its research found 85 per cent of consumers thought it was important for a good retirement product to be independently accredited by a third party.
Respondents to the consultation felt that for trustees a quality mark would assist them in signposting scheme members to products that have been assessed as being good, based on the quality of their governance and communications.
A RQM could also help support the development of a robust in-retirement market that operates in the interests of savers by setting out the standards of what good looks like in relation to the governance, default investments, member alerts and the communication of charges and risk, says the PLSA.
But Aegon head of pensions Kate Smith says: “As the regulator, it’s for the FCA to set consistent standards across the whole retirement income market income rather than leaving the job to a trade body to create voluntary standards. This will give much more effective consumer protection, forcing widespread adoption by all providers and schemes offering income drawdown, annuities and other cash withdrawals.
“The FCA is already looking at how people can compare retirement income products, particularly flexi access income drawdown. The Retirement Quality Mark shouldn’t jump the gun and await the outcome of this before forging ahead.”
PQM managing director Matthew Doyle argues that there is no reason why features of the RQM cannot be adopted by the regulator
He says: “As with the Pension Quality Mark, our intention is to set the standards in the industry and to drive improvements of those standards up. Fee capping is a strong example of how the standards set by PQM can then become part of the FCA’s regulations. We are confident that the insights we’ve shared in our response to the consultation document will play a pivotal role in setting industry standards for the at-retirement market.”
Pension Quality Mark Board chairman Adrian Boulding says: “The Board has been greatly encouraged by the strong support from across the industry for a Retirement Quality Mark and the useful role it could play in steering savers towards a good quality product at retirement, while also helping pension scheme trustees and employers in their roles. On behalf of the Board I would like to thank those who responded to the consultation so fully.
“We will continue to refine the standards and develop the infrastructure to support the RQM, and expect to launch the new mark later this year. In the interim, we will carry out further discussions with pension schemes and providers interested in becoming RQM award holders, as well as the wider stakeholder community.”
