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Retirement Strategy: Leader

This month, Retirement Strategy finds Personal Accounts Delivery Authority acting chair Jeannie Drake in a bullish mood about the success of the current reforms although I am sure many readers are more cautious.

Drake believes the scheme will set new standards in its approach to the decumulation process but admits there has to be certain trade-offs in return for low charges. This tension between service levels and charges is something underpinning many debates around retirement planning, for instance, arguments around the value of direct annuities.

Fixed-term annuities and master trusts appear to be the current provider flavours of the month. Money Marketing revealed in recent weeks that LV= and Aviva are looking at joining Living Time in launching a fixed-term product while many of the big providers are lining up multi-employer master trust launches in anticipation of the Government’s Motivation behind the move to master trusts is to circum-vent the RDR as well as the fact that they allow employer contri-bution refundspension reforms and the FSA’s retail distribution review.

The Retirement Partnership managing director Steve Lewis argues that fixed-term annuities can form the back- bone of a “cocktail” approach to retirement planning while Hargreaves Lansdown head of pensions research Tom McPhail suggests the product could lead to higher retirement incomes.

Scottish Life head of communications Alasdair Buchanan gets on his soapbox to warn that some providers in the group pension market are still writing unprofitable business in the shadow of the RDR extending its scope to include GPPs.

A motivation behind the move to master trusts is to circum- vent the RDR as well as the fact that they allow employer contribution refunds. The industry currently appears split about the benefits and dangers of the RDR encompassing GPPs and it will be interesting to track provider movements in the run-up to 2012.

Elsewhere, Standard Life and Dentons go head to head on whether small Sipp providers are the place to put business following the FSA’s recent review of the sector.

Standard Life head of pensions policy John Lawson suggests small players are hampered by a lack of resources and regulatory experience but Dentons Pensions Management business develop-ment manager Martin Tilley argues that many smaller firms offer superior bespoke service levels.

Many thanks for all the positive feedback following last month’s launch issue. Any comments or ideas for future issues should be sent to paul.mcmillan@centaur.co.uk.

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