The Pensions Administration and Standards Association has drawn up plans for a three-month pension statements season to avoid providers being hit by a capacity crunch.
PASA warned that asking all schemes to produce a benefits statement at the same time would risk a “serious capacity crunch”.
In a paper published last week (December 17), the industry body made a number of recommendations to make the implementation of statements season as easy as possible.
PASA has previously warned statements season itself could cause “significant difficulties, additional and unnecessary costs, and adverse implications” for schemes.
But pensions minister Guy Opperman believes sending everyone simpler annual statement at the same time would lead to conversations about pensions in the pub, which he endorses.
To help diffuse the situation PASA said statements season could be a period of three months, which would be “more effective than a shorter window” and “ensure a better experience and allow the industry to provide savers with the support they need”.
Though noting there was no “perfect time” in which to place a statements season, it recommended the three months should last from September to November, avoiding the start of the calendar year, the summer holidays and the Christmas period, all of which are busy enough already.
It noted the “strongest feelings” evoked by the statements season proposals concerned the format of the statements themselves — specifically, whether they would be sent on paper or digitally.
PASA recommended digital statements but it appears the government is unwilling to write off paper based ones.
Opperman had told a Work and Pensions Committee hearing in November: “Clearly, online versions are very important — dashboards will be crucial.
"But are you seriously saying that your elderly mum or dad, or my elderly mum or dad, and the vast cohort of pensioners out there who are not computer literate let alone unable to understand a savings app or a banking app and a pensions app going forward are [not going] to benefit from this?
“We will require written pension statements for some considerable period of time to come. That is absolutely clear.”
PASA argued that paper-based statements would run contrary to government policy around encouraging digital communications, preparing dashboards data, and minimising carbon footprints.
It also argued statements season information and the definitions underpinning it should align with the pensions dashboards, not least to avoid “saver confusion”.
It also disagreed with proposals that would require trustees to change their current valuation dates, as these would be unnecessary, costly and disruptive, it said.
Finally, it recommended that any implementation date chosen by the government must account for “other time-critical pension projects”, with PASA preferring autumn 2023 as it would allow administrators to prepare and test their systems.
“An early launch of a statements season could compromise the ability of administrators to effectively manage other recent and upcoming policy changes during 2022, including new rules on transfers out, production of simpler annual benefit statements, dashboards compliance and the upcoming nudge to guidance,” it said.