The Government has committed to introducing a “pension statement season”, with all retirement savers being sent annual pension statements within a short period each year.
However, a recent report from the Work and Pensions Select Committee has potentially put brakes onto the project by recommending the government adapt or drop its proposal.
Our latest insight article Kat Mitchelllooks at the proposals and what they would mean for workplace pension providers, advisers and employers.
The brainchild of Pensions Minister Guy Opperman, a statement season where everyone receives their pension information at the same time has been met with a mixed reception.
The Government has committed to creating the necessary legislation to get such a statement season underway this year.
Opperman has admitted the idea is “controversial” for some but has persisted with his assertions that it would help give people a better understanding about what they will have in retirement.
Speaking to the Work and Pensions Committee in November, he likened the approach to taxation, exams, and “what we do with a whole bunch of strategic decisions that occur in our lives”.
Under Opperman’s proposals, workplace pension providers would be given a set period of roughly a month when they would have to send out an annual statement to all their members.
During this time period, all schemes and providers would have to get all the annual statement information together and send them out.
Under the initial proposals it would seem that workplace pension providers will be required to send out this annual statement in paper format.
However, with the statement season being based on a similar system in Sweden, where people receive an annual pension statement each year from the Swedish Pensions Agency, showing an overview of savers’ national public pension, it seems likely that there may be the option for statements to be received by paper or through a digital mailbox added within the legislation.
With the idea of a pension statement season originally being proposed as part of the Department for Work and Pensions’ initial consultation on simpler annual statements in October 2020, the annual pension statement would look similar in terms of its content to the workplace pension statements now sent to members.
Opperman thinks a regular shared issue date for all statements would help it become a normal situation where people would meet in a social setting and have frank conversations about their retirement planning.
Over the past few months, a working group made up of industry representatives and the Department for Work and Pensions have been looking at the idea of introducing a pension statements season.
The group has been looking at issues such as whether a single valuation date or a single publication date would be achievable for all schemes, as well as the potential for a “capacity crunch” for administrators, and how a statements season would interact with the pensions dashboard.
It will also work through the legislative, regulatory and process changes required to implement a pension statements season, as well as looking at what guidance will be needed for trustees, administrators and employers.
Tune in to Benefits Guru on Thursday for part two
