Pension scheme trustees often lack confidence in their scheme retirement process. 70% of pensions trustees lack that confidence, a HSBC Actuaries and Consultants (HACL) survey reveals. It also found that 10% did not have a robust system in place for converting defined contribution funds (like personal pension arrangements) into retirement income, perhaps unsure of the retirement options available.
They warned that if a scheme’s decumulation phase is not clear cut enough and understood, members who retire and miss out after making bad decisions, perhaps by not getting the right annuity, could begin legal claims against scheme trustees or sponsors.
HACL said that despite the fact that the best and worst annuity quotes can differ by somewhere around 30%, some 44% of scheme members retiring in the next five years actually had “no idea” what their annuity incomes will be.
HACL said that this proved lack of clarity to be a big issue. It said the research, which polled 200 scheme trustees, showed trustees still have much work to do to formally implement processes for converting members’ DC funds into annuity income and finding them the best annuity rates.
Their head of trustee proposition, Steven Robinson stated that the current financial pressures make good pension scheme governance so much more important. Adding that undoubtedly this subject will remain at the top of the pensions’ agenda for this year and beyond. Annuities really are an important subject for a retiree, and there’s no getting away from it.
