In a statement released June 7, watchdogs said that while the pensions industry has stressed the need for regulators and government to ensure their efforts are coordinated, at this stage they do not believe proposing new rules is the right approach.
In May last year, regulators issued a call to the pensions industry on what influences consumers when saving for retirement and how they can be better supported to improve their retirement savings.
He said the insights gathered would inform policymaking and be used to target any future regulatory intervention aimed at improving consumer retirement pathways.
The changing nature of work and retirement means there can be no one-size-fits-all approach to ensuring good engagement with pensions
In its comments, the pensions industry said that given low levels of consumer financial literacy, there remains a “real difficulty” in pension communications, and that savers need personalized support while throughout their life.
Potential solutions to inequalities in pension outcomes were suggested by respondents, including providing support for women returning to work or improving access to Sharia-compliant funds.
In response to this, TPR announced that it will work with the Money and Pensions Service to “produce guidance which enables employers to support the return of staff to the labor market”, and consider how they can promote existing guidance from MoneyHelper regarding divorce and maternity leave.
The watchdog will also conduct an “equality review to understand how well the market works for different groups of savers to inform regulatory responses”, he added.
TPR will review the member disclosure section of the DC plan guidelines “to provide more guidance on inclusiveness, use of behavioral information and timing of disclosure.”
In addition, major trusts and large suppliers said they would like to do more to support consumers, but were concerned about straying into regulated or unsolicited marketing activities.
“These respondents highlighted the importance for consumers of receiving the right support at the right time to achieve good results,” said the release, which included pension dashboards as a potential key tool to improve pension engagement. .
However, respondents acknowledged that despite these efforts, many savers will never commit to retirement.
“That’s why it was important to optimize resources in DC programs,” the report says.
Regulators have outlined the top three harms facing consumers and pensions, namely that individuals struggle to make decisions that maximize their retirement savings, stay in poorly performing products, and are vulnerable to scams.
The statement says respondents agreed that factors that lead to these harms include behavioral biases (e.g. risk aversion or financial overconfidence), structural issues (types of jobs, gender , ethnicity or disability) and barriers to engagement (including difficulty in moving products).
David Fairs, Executive Director of Regulatory Policy, Analytics and Advice at TPR, said: “The changing nature of work and retirement means there can be no one-size-fits-all approach to ensuring good engagement. with pensions and look forward to working with the industry on innovations that help deliver communications that work for all savers. »
LGPS employers face legal risk due to non-compliance with Sharia law
According to a legal expert, employers participating in local government pension scheme funds could be subject to legal action by their members for failure to comply with sharia principles by their schemes and failure to offer staff a compliant alternative.
He said government, regulators and industry should be clear about the outcomes they want to achieve and work to improve and protect the pensions of all savers.
“Respondent feedback confirmed the need for us to be explicit in our goals and reinforced the importance of maximizing money throughout the retirement savings journey,” Fairs added.
“We will use this information to guide our future work and help consumers get the most out of their retirement savings.”
This article first appeared on FTAdviser.com