• Home
  • Admin/Tech
  • Benefits
  • Buzz
  • DB
  • DC
  • Diversity
  • Investment
  • Law & regulation
  • Risk reduction
  • Events
  • Whitepapers
  • Spotlights
  • Digital Edition
  • PPTV
  • Newsletters
  • Sign in
  •  
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
    •  

      You are currently accessing ProfessionalPensions via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • YouTube
  • Register
  • Subscribe
  • Events
    • Upcoming events
      event logo
      Webinar: Using passion for ESG to unleash member engagement

      This webinar will look at how pension schemes can harness their members’ interest in ESG to engage them more broadly with their pensions. In particular, it will look at exclusive research showing how members are reacting to ESG; their propensity to act versus their actual behaviour; and the expectations they have of providers in this regard.

      • Date: 26 Jan 2021
      • Webinar
      event logo
      Investment Conference

      This two part Investment Conference will bring you the latest updates from economists, asset managers and pension consultants. We will be taking a look at the outlook for the 2021 economy, alternatives, cashflow strategies and global equity markets to name a few, assessing how they fared through the volatility and what we can expect for the year ahead.

      • Date: 27 Jan 2021
      • Digital Conference
      event logo
      Webinar: What to put on your GMP Equalisation project roadmap for 2021

      This webinar will bring together views from actuaries, lawyers, administrators, trustees and data experts to look at the pragmatic, collaborative solutions that are open to schemes to solve the GMP equalisation challenges in 2021. It will assess the individual challenges schemes face with equalisations and provide some practical options that are available to resolve these issues.

      • Date: 02 Feb 2021
      • Webinar
      event logo
      Webinar: Will the world return to normal in 2021?

      In this webinar, PP editor Jonathan Stapleton will be joined by BMO’s chief economist Steven Bell and director of fiduciary management, Christy Jesudasan, alongside PTL trustee director Melanie Cusack and Isio’s head of fiduciary management oversight Paula Champion to discuss the significant impact of these themes on the pensions sector.

      • Date: 04 Feb 2021
      • Webinar
      View all events
      Follow our Professional Pension Events

      Sign up to receive email alerts about our events

      Sign up

  • Whitepapers
    • How DC schemes can gain exposure to different asset classes in a low-return environment

      So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap,' ‘pension freedoms' or consultations around ‘value for money', says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).

      Download
      Pension freedoms three years on

      In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.

      Download
      Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Spotlights
  • Digital Edition
Professional Pensions
Professional Pensions
  • Home
  • Admin/Tech
  • Benefits
  • Buzz
  • DB
  • DC
  • Diversity
  • Investment
  • Law & regulation
  • Risk reduction
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
  •  

    You are currently accessing ProfessionalPensions via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
  • Admin / Technology

DWP annual benefit statement consultation questions voluntary adoption

The DWP's consultation will run until 20 December 2019
The DWP's consultation will run until 20 December 2019
  • Holly Roach
  • Holly Roach
  • @HollyPensions
  • 18 November 2019
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

At a glance:

  • The DWP is seeking views on the principle and delivery of simpler annual benefit statements
  • Initially launched by an industry-wide group, Opperman continues to urge take-up of them
  • The consultation has questioned the efficiency and consistency of voluntary adoption

The Department for Work and Pensions (DWP) has launched a consultation setting out proposals for the adoption and launch of simpler annual benefit statements. Holly Roach reports

The DWP has published a consultation seeking views on the principle, adoption, and delivery of simpler annual benefit statements for workplace pensions.

The consultation is seeking views on the principles of short, simple statements, the presentation of information on costs and charges, as well as ownership of the guidance on the assumptions used in the statements and how they can help members identify whether their savings are on track.

Related articles

  • Woodford investors to receive third payment on 26 August as annual reports delayed again
  • How multi-national companies are providing pensions for mobile workforces
  • Mineworkers and British Coal schemes succeed in a rare US securities fraud class action case
  • Have investment managers improved their ESG approaches?

Unveiled at the beginning of the month, the consultation document includes proposals which would require the simpler statements to be presented on no more than two pages, and for the statements to work alongside innovative communication tools and technology, including the pensions dashboard.

The consultation also sets out proposals on adoption of the statements through voluntary or mandatory approaches and explores the potential costs of transitioning to any new approach.

However, the DWP said: "It is not clear that voluntary adoption of principles, descriptors or the statement can deliver sufficient consistency, nor where ownership of them should lie to ensure adoption is encouraged and that they are subject to ongoing development where necessary to reflect evolving best practice or changing regulatory requirements."

Additionally, the DWP questioned trustees and scheme providers on their anticipated timescale should they adopt the simpler statement, and asked what barriers are in place for those currently not choosing to adopt.

Pensions and financial inclusion minister Guy Opperman said: "Simpler statements provide clear information that people will actually understand, and this will encourage them to save more.

"I want pension schemes to drive forward real change quickly but, if necessary, I will consider regulation."

The DWP's consultation will run until 20 December 2019.

The statements were initially developed collaboratively by Quietroom, Eversheds Sutherland and former chairman of the Pensions and Lifetime Savings Association, Ruston Smith. Early adopters of them include PensionBee and Smart Pension.

PensionBee led the industry when it adopted the simpler statements in May and has now delivered them to more than 25,000 of its customers.

Smart Pension followed, adopting the simpler statement in June. The master trust's version of the statement was led by Smith, who is also one of its non-executive directors. It said the statements were "clear and accessible" and successfully delivered "key information" to members.

Director of policy and communications Darren Philp said: "Given the less enthusiastic take up by the industry to date, it wouldn't surprise me if the government decided to mandate this, especially if the industry doesn't get its act together.

"We're also all for transparency over costs and charges. Giving people even a rough idea of what their pension costs them is an important step, and it has taken us far too long to get to this position."

Eversheds Sutherland partner and head of pensions Francois Barker welcomed the DWP "opening up the debate over whether to make its adoption mandatory".

"The simpler annual benefit statement is not a party political issue, and we are confident that the next government - of whatever colour - will have close regard to the outcome of the consultation."

This consultation builds on the Auto-enrolment (AE) Review 2017: Maintaining the Momentum, which detailed how workplace pensions should meet the needs of individuals and employers while remaining fair, affordable and sustainable for future generations.

The simpler annual statements launched with the aim to "junk the jargon" and help people engage with their savings.

More than ten million people are now saving into a workplace pension as a result of AE, yet recent research has revealed that only saving the minimum contribution will not support a person to live a comfortable retirement.

In the 2017 AE review, the government promised a "more robust and inclusive savings culture" and unveiled plans to "maintain the momentum achieved so far". This consultation paper also gives respondents the opportunity to rethink the way information is presented to savers on the pensions dashboard.

The government has also proposed the statement be sent to members in an orange coloured envelope to ensure they catch members' attention and are opened.

Aegon head of pensions Kate Smith noted the simpler statements will "give savers more consistency and should be used as a building block for how pensions are shown on the pensions dashboard".

However, she said: "The tide is moving towards greater pension charges transparency, and savers should have access to how much their pension costs in pounds and pence. But this could prove to be a double-edged sword, as the inclusion of more information could lead to more confusion, with potentially a list of numerous costs and charges which will vary by fund.

"Pension providers may need to explain why the charges vary and what benefits they are paying for to avoid savers making hasty decisions. This may blunt the ambition to move to simpler shorter annual benefit statements."

AJ Bell senior analyst Tom Selby added: "Now is the right time to think radically about how communications can be simplified to the benefit of members, with digital platforms at the forefront. Aiming to move to a one or two page document for paper-based statements is the right approach.

"It is vital the government works with all relevant regulators, including the Financial Conduct Authority, to ensure the information requirements are consistent across different types of pension scheme."

The consultation is open to responses now.

A simplified annual statement

The simplified two-page annual statement was first unveiled at last year's Pensions and Lifetime Savings Association's annual conference in a bid to provide a best practice template for the industry.

The first iteration of best-practice document sat on just two sides of A4 paper and included the information that matters most to people saving for retirement - signposting members to a separate website should they wish to view more detailed legal and cost information.

It was tested by Ignition House, which conducted independent research involving over 70 in-depth interviews and a survey of 1,000 scheme members.

The research overwhelmingly found that the simpler annual statement is much clearer and easier to understand and that it can be read and understood in two minutes - which was considered a huge positive.

Those researched said that they were much more likely to read the simpler annual statement and consider it alongside their other statements to work out what they've got.

The statement received backing from pensions minister Guy Opperman The Pensions Regulator, PLSA, ABI, the FCA and a large number of pension providers - including Legal & General, Aviva, Hargreaves Lansdown, Scottish Widows, Smart Pension, Pension Bee, NEST and The People's Pension, some of whom have since integrated it into their processes.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Admin / Technology
  • Aj Bell
  • DWP
  • Guy Opperman
  • Simpler Annual Statement
  • Eversheds Sutherland
  • Quietroom
  • Smart Pension
  • Aegon

More on Admin / Technology

Hartshorn: The government and HMRC need to work together to find a solution to this issue
Mercer urges government and HMRC to clarify GMP equalisation guidance

The government must work with HM Revenue and Customs (HMRC) and the wider industry to clarify GMP equalisation uncertainties, Mercer says.

  • Admin / Technology
  • 21 January 2021
LGPS funds see increase in claims over historic transfers

Around two-thirds (77%) of Local Government Pension Scheme (LGPS) funds have received a claim relating to historic transfers over the past 12 months, according to Eversheds.

  • Admin / Technology
  • 12 January 2021
Webb: Everybody wants certainty and wants to know what they're going to have to provide and when
DWP urged to give pension funds a stronger steer on dashboard data

Schemes need more certainty over the data they will have to provide for dashboards, as the minister is expected to take a heavier stance in 2021, experts say.

  • Admin / Technology
  • 07 January 2021
The paper outlines who is responsible for managing the cyber risks faced by pension schemes
Pension scheme cyber risk - the key challenges and who is responsible

The Institute and Faculty of Actuaries' Patrick Kelliher and Vanessa Jaeger look at the key cyber risks faced by pension schemes, who is responsible for managing these risks, and how these risks may be managed.

  • Admin / Technology
  • 05 January 2021
Partner Insight: What is the cost of getting future-fit when it comes to pension technology?

The UK pensions sector is in dire need of a technology revolution – and there are plenty of forces at play to push and pull the industry into the 21st century.

  • Admin / Technology
  • 05 January 2021
blog comments powered by Disqus
Back to Top

Most read

Trustees will need to be corporate finance experts under new TPR powers
Trustees will need to be corporate finance experts under new TPR powers
Livingbridge sells Broadstone to Intermediate Capital Group
Livingbridge sells Broadstone to Intermediate Capital Group
Pension Schemes Bill set for final debate next week
Pension Schemes Bill set for final debate next week
Pension Schemes Bill gets final approval and waits for Royal Assent
Pension Schemes Bill gets final approval and waits for Royal Assent
Industry Voice: The tipping point for UK pension schemes
Industry Voice: The tipping point for UK pension schemes
Trustpilot

 

  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • YouTube

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading