DWP tells providers to deliver simple pension statements

DWP tells providers to deliver simple pension statements

The Department for Work & Pensions is considering if it will need to legislate on simpler annual statements, Guy Opperman (pictured) revealed.

In a debate in Parliament on Tuesday (March 12) about auto-enrolment, the minister for pensions and financial inclusion said it is his intention that "all private-sector businesses that provide pensions will be giving a simple two-page statement to all their customers".

He said: "Whether that is done on a voluntary basis or by statute is a matter to be decided."

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The document, which was developed collaboratively by an industry group in response to the government's 2017 review of automatic enrolment, provides information on the amount of money someone has saved into their particular pension scheme, the amount their employer has contributed, the tax relief they have benefited from and the amount of money they have in the scheme.

It is being supported by trade bodies and regulators, which have urged pension providers to adopt the new statement when communicating with their members.

The document was developed collaboratively by Ruston Smith, co-chairman of the DWP's 2017 automatic enrolment review advisory board and chairman of the Tesco Pension Fund, Vincent Franklin and Mark Scantlebury, from communication consultants Quietroom, and Karen Mumgaard and Francois Barker, from law firm Eversheds Sutherland.

Mr Franklin, founder and creative partner of Quietroom, argued that it should be for the industry and government to decide if legislation is needed for companies to adopt the new document.

He said: "People are likely to have several employers during their lifetime and so may well be a member of ten or a dozen schemes.

"To help them make good choices, it would be best if all those schemes sent people the same information in the same way. That is what the standard annual statement is all about."

Consolidator PensionBee is one of the early adopters of the new document, which should be rolled out to its clients in April.

Romi Savova, chief executive of PensionBee, said she is concerned that other providers won't adopt it without legislation.

She said: "They often claim that they have invested heavily in their existing annual statement infrastructure and they will consider the statement as part of broader revisions to their annual statement processes. That approach suggests a slow take up at best.

"The other concern is that the annual statement does not cater to every policy type (eg with profits). Nevertheless, we believe the simpler annual statement should be the default reporting standard for auto-enrolment pensions, which are all fairly similar and standardised."