The Department for Work and Pensions (DWP) is planning to review the way annual benefit statements for workplace pensions are written to make them easier to understand
It has launched a two-month consultation looking at how to deliver better pension statements that are shorter, simpler and have information that is easy to understand to make it easier for pension savers to plan for the retirement they want.
The consultation addresses three issues, firstly on the principle of short, simple, statements, presenting three options, as well as looking at how adoption can be delivered through voluntary or mandatory approaches.
The idea is that greater standardisation of the structure, design and content of statements could help improve individuals’ engagement with pensions.
The consultation does not at the current time propose changes to trustees’ obligations in the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013.
DWP says it will consult on the detail of draft regulations or guidance that might place additional obligations on trustees, subject to the outcome of this consultation.
It also considers the presentation of information on costs and charges that can help members identify what they have paid for their pensions. This would include providing member level charges and transaction costs’ information in pounds and pence on the annual benefit statement.
In addition, the consultation seeks views on a transfer of ownership of the assumptions underpinning annual benefit statements from the Financial Reporting Council (FRC) to the DWP, and amendments to these assumptions.
The consultation will also consider the relationship of simpler statements with innovative communication tools, including the pension dashboards which were recently given the green light by government, and how to encourage savers to open their statements.
The consultation closes on 20 December.