Aegon calls on the DWP to take a three stage approach to extending retirement choices to trust-based members.
In response to the DWP consultation ‘Helping savers understand their pension choices’, which closes 5th September, Aegon have offered a three-stage approach that the DWP could use to implement its agenda.
The first stage is that trustees should be encouraged through guidance to grant their members access to the core decumulation options including income drawdown, with regulation following once the legislative timetable permits.
Where trustees are unable or don’t wish to offer this in house, they should seek to partner with a scheme or provider with the necessary expertise.
The second stage should look at how trustees might support those members who don’t want to or feel unable to make their own retirement choices through some form of default retirement income strategy.
Aegon said that trustees should also double down on improving member engagement with their retirement options with any default retirement income strategy used as a “last resort”.
The third stage should consider how decumulation-only collective defined contribution could be added into the mix of retirement-income choices.
Steven Cameron, pensions director at Aegon said: “Aegon supports granting members of trust-based schemes access to the same range of freedoms as members in the contract-based world typically enjoy.
“But with a huge number of interlinking pension developments, including the value-for-money framework, pension dashboards and solutions to small deferred pots, we urge the DWP to implement their ambitious proposals in three stages.”