The Government plans to place a legal requirement on trust-based pension schemes to provide generic retirement risk warnings to members, but has stopped short of forcing them to personalise the information.
Policymakers have faced criticism for creating a two-tier regulatory system following the introduction of the pension freedoms in April.
Members of contract-based schemes, which are regulated by the FCA, receive personalised risk warnings from their provider about the impact of taking their pot as cash.
And while the Government will now put into law the requirement for trust-based schemes to provide generic warnings, it has not proposed bringing them into line with FCA-regulated firms.
A DWP spokeswoman says: “Trust-based schemes are not currently required to give generic risk warnings but we are proposing to make this a legal requirement.
“The nature of trust- based pensions means that many members transfer out to access decumulation options and, therefore, generic risk warnings are more appropriate. However the consultation is currently open and we are keen to hear from interested parties as to how they feel protection for pension scheme members could be improved.”
The DWP has also proposed scrapping the requirement for providers to put a value on guaranteed annuity rates when deciding whether savers need to take regulated advice.
The DWP sets out a proposal that would see the advice threshold based solely on the size of pots, not the value of guarantees.
As part of the pension reforms, savers are required to take regulated advice when transferring out of policies with safeguarded benefits, mainly defined benefit plans and GARs, worth more than £30,000.