Lizzy Holliday, Head of DC, Master Trusts and Lifetime Saving, at the PLSA, said: “If savers are to engage with their pensions, they need to be able to understand the communications they receive from their pension scheme. Some of our members have led the way in designing solutions that limit savers’ annual pension statement to two pages, and we were pleased to launch the Simpler Annual Statement template at the PLSA Annual Conference in 2018 as flexible good practice guidance.
“However, our member pension schemes take the view that, while it is very desirable to include comparable information in benefit statements, there should be enough flexibility to allow them to build on existing communications which, in the case of workplace pensions are often tailored to the needs of the specific workforce involved. Nevertheless, we shall work with the DWP as they develop the regulations and timeline for adopting them.
“We want to help everybody achieve a better income in retirement and believe that including the PLSA’s Retirement Living Standards in the template would help people join the dots between how much they have saved and how much they are going to need. The original Simplified Annual Statement included them and we hope that when it comes to drafting the regulations, the DWP will do likewise. The Retirement Living Standards are now used by pension and savings providers that reach almost 15 million savers.”
Neil Hugh, Head of UK Proposition, Phoenix Group comments: “We strongly support the ambition to create simpler annual statements and will continue to work with Government to ensure the content and design works for consumers. A template that is consistent, simple and clear will help increase engagement and understanding. However, we remain concerned that a ‘one size fits all’ template would fail to take account of the specific needs of certain groups of customers and would be in direct contrast to the more tailored approach that we believe is required to build engagement and help customers.
“While automatic enrolment is successfully helping more people to save for their future, the ongoing challenge is around building greater engagement. While a simpler statement is an important step forward, taking too prescriptive an approach risks stifling the innovation that will be key to achieving that engagement goal. We continue to support a principles based approach, that would enable the rollout of transformed annual benefit statements that are engaging and relevant to different groups of customers, whilst helping to ensure that the key information provided to pension savers was consistent across the industry, including information on charges.”
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