Pension Increase Exchange (PIE) options have increased in popularity in recent years. Some 31% of mid-sized schemes and 24% of large schemes are offering these to their membership.
In contrast, only 14% of small schemes currently offer their members a PIE at retirement but with medium and larger schemes leading the way, this may be something that will increase in future.
Similarly, our research showed that of those surveyed it was only the mid-sized and large schemes that offered their members a bridging pension option at retirement.
The findings on PIE and bridging pension options are similar to Aon's 2021/22 Global Pension Risk Survey which showed increasing traction for partial transfers. These can be a good halfway house option for members, by allowing them to transfer a certain amount to a DC pot, which they can access flexibly, and keep the rest to take as a guaranteed income.
What this means to members
PIEs and bridging pension options can smooth the allocation of funds to members across their retirement, allowing them to take more of their pension in the early stages when they may wish to have more money for certain lifestyle choices.
Consideration should also be given to the scheme pension reducing in the future, meaning members need to ensure they have enough for later life. It is therefore important schemes provide members with good support to be able to understand how the option would work with their personal circumstances.
This post was funded by Aon