Companies that offer no contribution to staff pension plans may have to pay for face-to-face advice under plans unveiled by the Department for Work and Pensions this week.
A 12-month pilot scheme will look at three ways that non-contributing employers could give pension information. The options are an ABI-backed employer's advice pack, a group advice session offering non-regulated advice and one-to-one advice sessions paid for by the employer.
The DWP has also unveiled an online retirement planner that, from 2006, will give individuals a personal view of their retirement prospects based on data from the state system and product providers. Individuals will be able to nominate their IFA to access the data on their behalf.
Other plans under review include automatic enrolment of employees when they join a company which has a contributory scheme, requiring them to opt out rather than opt in, and a proposal for a US-style system where staff commit to increase pension contributions if their income increases.
Work and Pensions Secretary Andrew Smith says: “The state of your pension should be as important as the state of your health. We want to provide people with the tools to make informed choices.”
A&B head of pensions Michelle Cracknell says: “Somebody planning now faces a moving target – we have the pension credit and have seen changes in retirement age and Serps. What we need most is a clear statement on where people will stand at the time that they retire.”