The Pensions Administration Standards Association has published guided retirement operational readiness advice, designed to help trustees, administrators and providers begin assessing how ready they are to deliver guided retirement in practice.
As part of the recently passed Pension Schemes Act, workplace defined contribution schemes will be required to offer members a default retirement-income solution. This entails a structured route towards retirement in DC, including advice and consultation with individual scheme members.
The new advice from PASA focuses on the operational changes likely to be required to support guided retirement and the default pensions developed within it.
It also highlights the potential need for changes including greater workflow automation, stronger system integration and data flows, clear accountability across the organisations involved, appropriate controls around automated decisions, and communications and support which extend across the full retirement journey.
A detailed Guided Retirement Readiness Checklist accompanies the PASA advice, providing schemes and administrators with practical questions covering strategy, systems, data, governance, communication, risk and compliance, and delivery planning.
Jess Rigby, chair of PASA’s DC working group, says: “Guided retirement won’t simply be a product design exercise. Whatever the final framework looks like, it will ultimately have to work operationally for administrators and, most importantly, for members.
“That means understanding whether systems can support the journey at scale, whether the right data is available, who is responsible for what, how members will be supported and how retirement income will actually be paid reliably.”
The revised government timetable for guided retirement, with implementation now expected from 2029, is intended to give the industry additional time to prepare. PASA cautions, however, that the scale of the operational change involved means this time will need to be used carefully.
