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Pada plan for auto Omo

Personal Accounts Delivery Authority chief executive Tim Jones has revealed Pada is considering making open market the default option for the decumulation of personal accounts.

Pada proposed setting up a panel of providers to supply annuities to retiring investors in a consultation document launched in December but Jones says the thinking has moved on since then.

He told Money Marketing: “Before we got into this consultation, I thought that what one might call automatic Omos were insufficiently developed to be a credible alternative to a provider panel.

“We have now had people suggest we might be able to get our problems solved through an electronic Omo and not need a provider panel and I think that is definitely worth further investigation. We are not hung up on a provider panel, what we are trying to do is fix a problem.”

He adds that if Pada does take the panel route, it is likely to be temporary. “Strategically, it is not clear to me that we would need a provider panel forever. The electronic Omo looks like a better long-term solution.”

Jones also revealed that the pension scheme is “highly unlikely” to be called personal accounts, with six other names being considered after Pada conducted market research on 24 names in April.

He says: “The only clue I will give you is that personal accounts is not one of the names. I can envisage some bizarre circumstance where it actually ends up being called personal accounts but it is highly unlikely.”

Over the summer, extensive quantitative research will be undertaken with two names with the winning brand selected by the end of the year.

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