Pensions - Articles - IFoA warns of risks in new pensions freedoms

 The Institute and Faculty of Actuaries (IFoA) warns of the risks surrounding the new pensions freedoms coming into effect in April 2015. Individual members of Defined Benefit (DB) pension schemes may be targeted to transfer out of their current schemes and into Defined Contribution (DC) schemes to enable them to benefit from the new freedoms. However, individuals need to understand the risks this involves. The IFoA has published guidance for its members ahead of the April changes.

  

 Desmond Hudson, Chair of the IFoA’s Regulation Board comments,
 “There is a danger that unscrupulous selling or advice to the unwary could see individuals suffering financial loss. People who transfer benefits out of their existing DB schemes and into DC schemes may be accepting more risk than they realise by giving up a lifetime income. The IFoA is also encouraging life insurance companies to develop products for the new retirement market that are fit for purpose for the individuals who would be purchasing them and do all they reasonably can to ensure well informed decisions are being made .

  

 “The public should be reassured that actuaries have professional responsibilities when providing advice, as IFoA members have an obligation to observe the principles of The Actuaries’ Code in the public interest that promote confidence in the work of actuaries and the actuarial profession.

  

 “The IFoA expects its members working in both the pensions and life insurance industries to ensure any advice given is objective and considers all the risks. This includes any advice given to employers providing DB schemes, providers of retirement products, individual scheme members, scheme trustees and potential clients.”