The Pensions Regulator (TPR) has issued a series of guides aimed at improving pension scheme members’ understanding of rights in relation to pensions.
The guides are entitled:
- Talking to your employees about pensions: A guide for employers – this relates to personal pensions (not occupational pension schemes)
- Making your retirement choices – Think before you choose
The first guide is jointly produced with the FSA. This guide includes suggestions on how employers should communicate an employee’s benefits options to them and how to answer key questions that may be raised.
The second guide is aimed at those approaching retirement and have defined contribution (DC) benefits in an occupational pension scheme. It is designed to help members to make informed decisions about retirement income and encourage them to research the best annuities rates available more thoroughly.
Schemes with DC benefits are required to offer members the open market option, ie the right to purchase annuities from any provider in the market. Further, schemes must provide basic information to members six months before retirement.
Nevertheless, TPR has found that only a small minority of members exercise this right and suspects that this is due to a lack of effective communication by trustees and providers. It is hoped that this guide will remedy this.