In response to a Personal Accounts Delivery Authority consultation paper, the IMA says issues around choice and consumer behaviour need to be addressed.
The IMA says it accepts Pada has to operate within existing legislation in the context of a market characterised by comparatively small DC pensions pots in the early years.
But it believes a more flexible regulatory regime, with more choice for retirement income in the longer term, is needed in the longer term.
IMA chief executive Richard Saunders says: “As DC pension saving becomes mainstream, the decision about how to maintain income in retirement will be of increasing importance. The current annuitisation requirements in the United kingdom are too inflexible to meet everyone’s needs and will inevitably have to be reviewed in due course.”