The Pensions Management Institute is reconsidering the launch of a new qualification covering pension ‘member guidance’, following the announcement in the Budget promising all retirees a similar service.
The qualification, the PMI Certificate in Pension Scheme Member Guidance, is still under development following the announcement last year that PMI, the Pensions Advisory Service and JLT Employee Benefits were joining forces starting to develop it. It was due to be rolled out “later this year”.
The qualification is set at the equivalent of a level four national qualification and would have allowed successful candidates to help pension scheme members understand the full range of options available to them.
However, since the original announcement chancellor George Osborne announced in the March Budget that he is set to implement a ‘guidance guarantee’, promising retirees impartial, “face-to-face advice”.
Speaking to FTAdviser, Paul Couchman, PMI chairman and managing director of Premier Pensions Management, said depending on what the government announces in its ‘guidance guarantee’, the qualification may need to be changed.
He said: “Clearly we might have to change things now. It was a non-regulatory qualification which would make sure people understood their options and would help people with their retirement plans.
“[However] the guidance qualification might be good deemed as good for advisers if they are providing the ‘guidance guarantee’. But I do not know if the regulator will go that far as government bodies do not want to endorse qualifications.”
Previously the Council of Mortgage Lenders revealed that in its current format, the guidance would last for 15 minutes, however Mr Couchman does not think this is sufficient.
He said: “It should be a minimum of 30 minutes but I can’t see this happening, especially if it is meant to be free. The guidance should look at the options of retirement and the implications, the implications of taking it as cash and understanding the different types of annuities.
“Annuities will still be popular and I think [people] will take advice on impaired annuities. People still want an income at retirement.”
There have been many responses to the consultation on how the guidance should be delivered. The Association of Professional Financial Advisers believes the Pensions Advisory Service as well as the Money Advice Service are in the best position to deal with it.
However, Mr Couchman believes this will be costly for TPAS.
He said: “TPAS would have to built a system, a new business model for them to give a proactive approach. If providers give the guidance, significant changes will have to be made.”
