The Pensions Regulator has issued guidance for trustees when communicating with members about flexible benefits.

As of 6 April 2015 members of occupational pension schemes offering DC benefits now have more options for taking retirement income and fewer restrictions on the amount withdrawable as cash. The four main decumulation options are:

  1. Lifetime annuity (or scheme pension if offered by the scheme)
  2. Flexible access drawdown
  3. Numerous cash lump sums at various stages
  4. A one-off cash lump sum

Trustees can decide which options, to offer members, but they may wish to consult with or get consent from the scheme employer(s). Available options should be made clear to the members in the circumstances and form required by the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (the “Disclosure Regulations”). Members must also be informed that they can elect to transfer their flexible benefits to another scheme in order to take advantage of the flexible benefits. 

Pension Wise

Where the Disclosure Regulations apply, trustees are required to inform members how they can access Pension Wise, the government’s free and impartial advice service (

This is also a requirement where a member is over or within four months of normal pension age (55), where the member meets the ill-health condition, where the member requests information about taking flexible benefits (or informs the trustees they are considering or have made a decision about what to do with such benefits) and there is contact between the trustee and member about the options available. 

In some circumstances trustees may need to tell individuals about Pension Wise following the death of a member or beneficiary. However, Pension Wise does not have to be mentioned if trustees are simply sending out annual benefit statements. 

There is a standard government developed letter available on the Pension Wise website that can be used to communicate with members. This must be accompanied by a separate statement that the member should consider independent legal advice. Equally a trustee can develop their own statement but should check carefully the guidelines as to what this should include.

Where the trustees have contacted a member, or a member has contacted trustees about what they may do with their flexible benefits, the trustees may need to provide a statement that the member can request further information and that this information may help the member decide what to do with the flexible benefits. 

All the information (and any additional statements where required) can be provided verbally unless they are requested in writing. There are circumstances where trustees may not need to provide some or all of this information and the trustees should consult their legal advisers to determine this.

Other new requirements for retirement communications

There are also additional requirements on the information trustees must send to members as they approach retirement.  Where disclosure regulations apply, a retirement wake-up pack must be sent to members at least four months before they reach retirement date. The same information must be provided where a member requests information about taking flexible benefits and they are over or within four months of normal minimum pension age (currently 55) or they meet the ill-health condition. 

The information to be given to members in these circumstances must include:

  1. A statement of the options available to the member under the scheme rules
  2. A statement that they have the opportunity to transfer flexible benefits to one or more different pension providers
  3. A statement that different pension providers offer different options in relation to what the member can do with the flexible benefits, including the option to select an annuity
  4. A statement that different options have different features, different rates of payment, different charges and different tax implications
  5. A copy of the Money Advice Service leaflet or a statement that gives materially the same information
  6. An estimate of the value of the member’s flexible benefits, the date that this was calculated, an explanation that it is not guaranteed and information about any guarantees or features, restrictions or conditions that could affect the value
  7. A statement that there may be tax implications associated with accessing flexible benefits, that income from a pension is taxable and that the rate at which income from a pension is taxable depends on the amount of income that the member receives from their pension and other sources. 

If relevant, members must be given an explanation that they have the right to benefits other than flexible benefits, how they can access information about them and, where a scheme is not a money purchase scheme, a statement confirming their normal pension age and that the value of their flexible benefits is likely to be lower if the member accesses the benefits before normal minimum pension age.

Generally the trustees do not need to send the above information if they have provided the same information to the member within the last 12 months. However, where a member is approaching retirement date trustees must provide the information in relation to paragraph vi) above alongside a statement that the member has been given information about the flexible benefits that may be provided, their opportunity to transfer those benefits and the options available under the scheme rules. This is all in addition to signposting the member to Pension Wise.

Trustees may wish to consider what they communicate to members to whom the disclosure regulations do not apply e.g. younger members as some of the information may be of use to them if they are transferring from the scheme. 


Where information is required to be provided the relevant timeframes are broadly:

  • Where the member is approaching retirement date, at least four months before that date (or within 20 days of retirement date if the retirement date is specified less than four months before the date the benefits become payable)
  • Where the member requests information (or informs the trustees they are considering/have made a decision in relation to what to do with flexible benefits) within 2 months of making the request/informing the trustees
  • Where there is some form of other contact between trustees and affected members about what they can do with flexible benefits, within 20 days of the initial contact.

Retirement Options and Generic Risk Warnings

Trustees are encourage to provide generic risk warnings in respect of the four main retirement options available to members whether or not they are offered in the scheme, particularly at the point a member is required to make a final decision to take their retirement benefits in a particular form or to take a transfer to another scheme/provider.