Simple benefit statements provided to members of workplace pension schemes must be aligned with pension dashboards to avoid confusion, a senior spokesperson has said.
Responding to the Department for Work and Pensions' latest consultation, Kate Smith, head of pensions at Aegon, said: "It’s vital that the information shown on simpler annual benefit statements is consistent with that shown on pension dashboards.
"A lack of alignment will be confusing, defeating the purpose of trying to improve engagement. To avoid this, these two initiatives should be joined up, rather than approaching this very thorny issue piecemeal."
She said there were many "moving parts to be nailed down and many overlapping initiatives on the go", including the pensions dashboard, which is now expected - after a lengthy delay - to be implemented in April 2023.
Smith added: "We believe a more joined-up approach is needed across government, regulators and the pension dashboard programme to give simpler annual benefit statements a better chance of succeeding. Delaying the implementation date by a year to April 2023 allows more time for a more joined-up approach."
Her comments on the eight-page consultation on the draft occupational and personal pension schemes (disclosure of information) (amendment) regulations 2022 were echoed by Greer Flanagan, senior consultant at Hymans Robertson.
Flanagan agreed the timescales needed to be better aligned with other government initiatives surrounding workplace pensions.
She said: "While we applaud the aims of the consultation, we also have some concerns around the proposed timescales.
"Allowing an extra year for this to be put in place would not only ensure it is implemented correctly but it will also enable these statements to be automated which would be a huge step forward."
Currently, the new length and format of the workplace pension benefit statements is expected to be brought in in April 2022.
According to the consultation, the new-look statements would be set out on just two sides of A4, and be sent to members (except those in receipt of benefits) of certain defined contribution workplace pension schemes used for automatic enrolment.
The proposed simpler annual benefit statement will enable a member to see:
- how much money the member has in their pension plan and what has been saved in the statement year,
- how much money they could have when they retire,
- what they could do to give themselves more money at retirement.
But while Aegon and Hymans Robertson broadly welcomed the recommendations, their responses to the consultation - which closed on June 29 - included caveats not just around the timescales but also on the restrictions as to who gets it, and how.
Smith commented: “Increasingly, the pension industry is moving to digital first communications, which tend to be more engaging, allowing information to be delivered in targeted, personalised bite-sized chunks, incorporating tools, enabling savers to model personalised ‘what if scenarios’ and including signposting to further information.
"And many pension savers expect to access their pension information digitally on their phones, tablets and laptops. We strongly believe that digital annual benefit statements would work much better, with the potential of improving savers’ engagements and outcomes, than paper-based statements."