Aon has revealed defined benefit (DB) schemes are offering more support to members in their decision making at retirement, with one in five schemes now including personalised transfer value figures in retirement packs and making online tools available.
The firm's 2019 Member Options Survey, which questioned more than 320 DB schemes, found improvements in all areas compared to in 2018. These included a rise in the use of personalised transfer value figures, independent financial adviser (IFA) support, and figures about member options. The survey revealed one fifth now make online tools and IFA support available compared to around one tenth in the previous survey.
Over the next 12 to 18 months, Aon expects this to rise to almost one third of schemes.
The survey revealed the decisions trustees and sponsors are making in regards to member options and support, with just 10% of schemes now just ‘simply meeting statutory requirements' following the introduction of Freedom and Choice - down 6% from the previous year.
It further demonstrated that around one third are offering additional flexibility alongside the usual options of a standard transfer value, a pension and a tax-free cash lump sum.
Of these, one third (32%) were providing members with the option to convert some of their pension to a higher level of pension in return for lower future increases with a further 24% offering a partial transfer option.
Senior partner and head of member options Ben Roe commented: "An increasing number of schemes are moving towards offering members additional advice and the tools necessary to make well-informed decisions at retirement.
"It is surely better for trustees or sponsors to make this advice available to members, rather than leaving them to fend for themselves finding a suitable IFA."
He continued: "Another key change is in the flexibility being offered to members within DB schemes, so that the freedoms available in defined contribution (DC) schemes can be mirrored.
"Transferring out of a DB scheme can be seen as an ‘all or nothing' decision but options such as partial transfers can be considered a middle ground between the security offered by a DB pension and the flexibility from transferring to the DC world".
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