Heard of PADA? Thought not. It stands for The Personal Accounts Delivery Authority (PADA), and they have everything to do with the proposed personal accounts for pension saving from 2012.
As part of their development work, they are now looking to appoint a panel of insurers to provide pension annuity options to scheme members. The annuity panel is one of the major proposals PADA has prepared for industry discussions on Personal Account decumulation options.
PADA has proposed setting up a panel of annuity providers, which members will be referred to should they reject the open market option (OMO). Approaching retirement, Personal Accounts members will be presented with detailed information about the OMO and a ‘focussed choice’ option. This will consist of a panel of annuity providers who must be able to provide annuities for those with very small funds. Most funds are expected to be less than £10,000 in the first five years of Personal Accounts.
The ideal is that the panel will be accessed via a website ( a bit like this one), allowing scheme members to access instant annuity quotes and to instantly purchase their preferred option.
PADA want to come up with the best possible solutions for members of personal accounts, so that they get a good retirement income from their pension fund. The options available will therefore need to be easy to understand.
The industry discussions are to seek the best ways of delivering information about the OMO and the focussed choice options, and how to serve those individuals who do not wish to choose to annuities.
