Buzz: Trust-based DC failing to promote shopping around

clock • 1 min read

Trust-based defined contribution schemes are still not doing enough to help members shop around for the best annuity, say Buzz contributors.

Respondents said, by a margin of two to one, that  schemes were failing to adequately promote the open market option for retirees.

__________________________________________________

Question: Are trust-based DC schemes doing enough to encourage members to 'shop around' for an annuity?

p27-chart-3__________________________________________________

"It should be a matter of course that this is done but ignorance and complacency rule," said one contributor. "It is a swings and roundabouts situation for the providers but could mean several thousands of pounds difference to the pension payout."

But another respondent who thought schemes weren't doing enough was uneasy with the idea of forcing them to act.

"Why doesn't TPR or the FSA sponsor advertisements in the media advising the public to shop around?" they suggested

But a significant minority thought schemes were doing enough to help members, or were under no obligation to do more.

"A lot of trust based schemes shop for the member," explained a respondent. "Then they provide the information to allow members to review their enhanced annuity options."

Another contributor said: "Shopping around is just that: a decision by the individual to look at their options."

More on Defined Contribution

Just one third confident in making retirement decisions, TPT says

Just one third confident in making retirement decisions, TPT says

Pension provider set to launch new DC proposition in H2 as it releases findings

Jasmine Urquhart
clock 23 April 2024 • 1 min read
Industry split on whether pausing AE contributions should be permitted

Industry split on whether pausing AE contributions should be permitted

Buzz survey finds no majority in opinion on allowing employees to halt their contributions

Martin Richmond
clock 23 April 2024 • 3 min read
Industry calls for ban on pension switching incentives

Industry calls for ban on pension switching incentives

PP survey finds 61% back calls for ban and voice concerns over need for the practice

Jonathan Stapleton
clock 23 April 2024 • 2 min read
Trustpilot