Nearly 9 out of 10 trustees and employers of defined benefit Schemes believe they should be doing more to communicate with members over their retirement choices, according to a poll conducted by Hymans Robertson.
The poll took place as Hymans Robertson gathered a panel of pension experts from across the industry to discuss whether trustees should do more to support DB scheme members with the complex decisions they have to make about their retirement, since the introduction of pension freedoms.
Commenting on the research, Carolyn Saunders, partner at Pinsent Masons said the role of trustees is changing “Those trustees who still believe that it is ‘safer’ to do nothing than to actively communicate with their members are living in a fairy tale.
"The pension landscape has changed unrecognisably over the last number of years and the real risks now lie in inaction.”
Janine Wood, independent trustee at ITS Limited, said: “It is time for trustees to stop feeling like it is ‘untrustee-like’ to make members aware of the options that they have on retirement, outside of their DB scheme.
"Trustees have a duty and a responsibility to make sure their members aren’t left to sleepwalk into poor retirement decisions.
"I would not wish to be the trustee who takes a phone call from a dependent where the member had died shortly into retirement, challenging the lack of information they had received when making their retirement decisions. Members need to be sure they really understand the right move for them and that is not always taking a DB pension."
Ryan Markham, senior consulting actuary at Hymans Robertson explained: “Schemes have changed the rules to make it possible for members to access their benefits flexibly, and all the evidence suggests that many more are doing so.
"The number of people choosing to ‘cash in’ their final salary pension has soared. In the past 6 months we have seen an almost three fold increase in transfers out across our clients compared to pre-April 2015 levels.
”Yet too many schemes are taking a passive approach to both communicating with and supporting their members with the freedoms. Not only does this put members at risk of poor retirement decisions and scams, it also puts trustees and employers at risk of being accused of not providing sufficient information to make an informed choice."
Fiona Tait, technical director, Intelligent Pensions, said: Employers who have done a good job of getting their employees to the point where they have built up reasonable retirement savings will not want to see that hard work undone.
"Having supported them this far it does not make sense to simply draw a line and say "you're on your own now". Whilst they may not want to go to the expense of funding financial advice there is a lot more that could be done do to point them in the right direction."
