Duty should be on trustees to support decumulation decisions through the offer of products and services.
Speaking at the Pensions and Lifetime Savings Association (PLSA) annual conference pension head of policy collective defined contribution and DC decumulation at DWP Julian Barker said that the outcome of a recent consultation suggests a consensus among experts that trustees are key in providing member support during their decumulation decision process.
The panel, which also included head of master trust at Standard Life Donna Walsh and pensions director at Kingfisher James Chemirmir, discussed what is needed to deliver better decumulation communications and products for DC retirees.
Barker said: “DC members need to make a lot more decisions and in particular the hardest decision is the one about decumulation where they need to decide how their pension pot will support them for the rest of their lives.
Barker said DWP’s consultation in July titled ‘Helping savers understand their pension choices,’ which was on what support and decumulation products are currently on offer to members, and what may be offered to them in the future, had had 70 contributions, which are still being reviewed by the government.
However, according to Barker’s analysis, the contributions suggest a consensus on placing duties on trustees to support decumulation decisions through the offer of products and services. He also said that most respondents were clear between that support and a holistic communications journey that would help them gauge members and help support them through their pensions savings and retirement.
There was also a common view that action was needed, he said: “We know that there are new products and services being developed all the time but we also know that the coverage across the membership is very patchy and there was definitely consensus that we would need to take some action as government to help drive that sort of change.”
He added: “There was less agreement about defaults and the use of CDC and there’s also some practical considerations about partnership including where liability lies if things go wrong.”
Barker confirmed that a follow-up consultation response is due in the next few months and will focus on the communications journey that would support members.
