The relationship between pension scheme administration and ...

On the first bullet point, notwithstanding Regulator andFSA attempts to allay fears in this area, a concern still wasexpressed about the risk of trustees being seen to giveadvice.Moving on, when asked about the timing of retirementprocess communications, only 18 per cent of respondentsthought that communication should begin more thanone year before retirement date; the majority suggesting‘between six months and one year before’, largely in linewith legal requirements. Those going beyond the ‘letter ofthe law’ recognised the benefits of this with a respondentobserving that communication should start “Ideally 5 to10 years before with some education sessions and then6 to 12 months in terms of quotes”.Finally, on decumulation, in the June 2010 Budget it wasannounced that the effective requirement to buy an annuityby age 75 would be abolished. Draft legislation for this iscontained in the Finance Bill 2011 clauses.Although very recent, this is a potentially significantdevelopment for defined contribution arrangements andnot just in relation to high earners. We expect this changeto have a material impact on retirement processes in someschemes and, notwithstanding the fact that the provisionsare not even on the statute books yet, a significantproportion of respondents appear to agree, with over30 per cent having already considered the impact on theirscheme and others saying that ‘it was on the agenda’.In terms ofcommunication withmembers, when doyou think the retirementprocess should begin?Less than six month’sbefore a member’sexpected date of retirement(NRA)Between six months andone year before retirementdateMore than one year beforeretirement dateOther (please specify)18.0%3.9%60.1%18.0%4. http://www.thepensionsregulator.gov.uk/codes/code-related-internal-controls.aspx#s24155. Source: various (Pensions Regulator and ABI)7