The number of money-purchase pension products should be slashed from 15 to three according to the Pickering review's recommendations. A radical simplification of generic pension products forms a key part of the pensions report.
The sheer number of money-purchase products is seen as a “key complicating element” within pensions according to the report. The three products it wishes to see as occupational defined benefit pensions; employer-sponsored money-purchase arrangements (traditional defined contribution or group-based stakeholders) and individual pension arrangements, including top-ups to occupational pensions. The move was predicted in this week's Money Marketing.
Pickering says much of the current complexity has come about because of the way the DWP and Inland Revenue regulations clash and hopes the two departments will play their part in the simplification. The report says “it will be vitally important that the commercial providers do not complicate it by seeking to differentiate between the undifferentiable”.