In anticipation of the new rules, the Pensions Regulator has published a draft guide to communicating with members about pension flexibilities. The guide focuses on the proposed changes to be implemented by the Occupational and Personal Schemes (Disclosure of Information) (Amendment) Regulations 2015. Although still in draft form, it is likely that the Regulations will take substantially the same form when enacted and the regulator’s guide is therefore unlikely to change.
The guide sets out the content of communications required four months before a member reaches their retirement date. It also applies to those who are aged over 55, or meet the ill-health conditions, and are considering what to do with their flexible benefits.
The communications must include details of:
- the new Pension Wise service
- the different options available to the member
- the potential tax liabilities
- a pensions guide approved by the Pensions Regulator (yet to be devised) or a statement containing the same information
- an estimate of the value of their flexible benefits.
A handy communications timeline and an example of a good practice process can be found at the end of the guide.