You are here: cherry > Press releases for November 2010 > Trustees failing members at retirement - as Partnership supports Pension Regulator’s call for more guidance

03 November 2010

LONDON - The Pensions Regulator today updated its guidance notes, ‘Making Your Retirement Choices’, to help members make good decisions about their retirement income. Partnership, one of the UK’s leading annuity providers has thrown its support behind the regulator, believing trustees and providers can do more to issue clear calls to action, which encourage members to shop around for the best annuity deal. This is particularly relevant to pension trustees, where their hard work advising members on investment options during the accumulation phase can be lost in a flash if members take sub-optimal annuity solutions at retirement. The regulator emphasises that it is a legal requirement that members are offered the open market option (OMO). However, the regulator’s research shows that standards are mixed, even among literature which is technically compliant. Despite 98% of literature reviewed by the regulator including information about the OMO, only 23% of members exercised their right to shop around. Commenting on this initiative, Andrew Megson, Managing Director of Retirement at Partnership said: “We are delighted that the Pensions Minister, Steve Webb and the regulator’s acting Chief Executive, Bill Galvin, are promoting the importance of shopping around for the best annuity in retirement. “This is a once in a lifetime decision – arguably the most important financial decision someone in retirement will make – so it is shocking to hear that only 23% of members surveyed by the regulator actually chose to shop around, particularly when the Pensions Minister also highlights that scheme members eligible for an enhanced annuity, through simply smoking or having health problems, could be missing out on increasing their pension by 33% or more.” Partnership was the first company in the UK to offer higher retirement incomes by taking account of people’s health and lifestyle conditions. Another important issue highlighted by Galvin, is the need to see trustees delivering simple information that helps members maximise their retirement income, rather than ‘putting people off with jargon or legalese’. “Over the last 12 months Trustees and their Advisers have increasingly engaged us as they become aware of the serious consequences of members ending-up with sub-optimal retirement income solutions, said Megson. Given that over 40% of scheme members could be qualifying for an enhanced annuity when they retire, the quality of engagement through the vesting process is absolutely vital. The OMO may be the perfect solution but take-up is poor and institutional approaches are required to ensure that better default options are available to all.” – Ends –

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