The National Association of Pension Funds (NAPF) has issued a call for expressions of interest (EOI) on the provision of at-retirement services for those saving in defined contribution (DC) pension schemes.
The NAPF is interested in working with advisers, brokers and other parties active in the at-retirement market to develop solutions to help more employers and trustees appoint advice and brokering services and secure a good deal for their scheme members.
The EOI process follows the publication in June of an NAPF report, which highlighted a number of barriers that may prevent trustees and employers from appointing advice and brokering services.
The NAPF is now looking to develop support for employers and trustees to help them put these services in place, so that they can help those saving in DC pension schemes with the one-off decisions they need to make at retirement around annuities and income drawdown.
It is considering the following models of support:
- A quality-mark scheme that would assess advisers and brokers against a set of minimum quality standards. Any service meeting the standard would be accredited by the NAPF, or an appointed body, and added to a shortlist.
- A limited panel of adviser or broker services with the selection based on a rigorous assessment process. This could simplify processes and reduce costs for those running DC pensions, and provide assurance that due diligence had been applied to the panel member selection. Other services could be included, such as educating the workforce about options at retirement.
- Alternative propositions, for example the potential for insurer-sponsored solutions, that could provide more universal access to advice and brokering services to parts of the market that may currently be considered uneconomic to serve.
The EOI exercise is the first exploratory phase in the potential development of an NAPF service proposition in this area. Assuming a positive outcome from the EOI process, a formal request-for-proposal stage is expected to follow with a smaller number of short-listed parties.
Joanne Segars (pictured), chief executive at the NAPF, said: “Too many savers are failing to make the right choices or convert their pension pot into the best deal possible when they reach retirement. While things are slowly improving, people need more support.
“Our aim is to act as an independent source to tackle some of the market barriers and take some of the hassle out of finding the right adviser or broker. This is an exciting project for the NAPF and we are looking forward to hearing from the wider pensions and advisor industry to see how we can take things forward.
“Auto-enrolment is on course to bring up to nine million people and one million employers into pension saving. It is fantastic and important that so many are coming into pensions, but we need to look at what happens when they stop saving and want to retire.”