“A-day is going to cost you money” Penny Green (pictured) the president of the Pensions Management Institute, has warned.
Speaking during the session ‘Six months to A-day, where should you be?’, she said that employers will incur significant legal and actuarial costs in preparing for pensions simplification.
She added that “in an ideal world” employers should have already put project plans in place, drawn up budgets, devised communication strategies and trained their staff.
But she admitted that the pensions industry was still waiting for some legislative details to be clarified in relation to pensions simplification.
Nevertheless, she said that employers could still make key decisions in relation to A-Day so that the necessary pension scheme rule changes could be drawn up and members informed of them.
Decisions should be made on whether members of money purchase schemes will be allowed to continue to make AVC contributions, and if so whether these will be capped and or matched. Where pension schemes allow members to retire and take benefits at 50 years old then a decision will also have to be taken on when the change to 55 years should come into effect, she added.
“A policy should also be agreed with human resources on how flexible you are going to be in allowing people to take a bit of pension and carry on working,” said Green.
Steps should also be taken to identify those members who may be able to take a larger lump on retirement pre A-Day and senior executives who maybe affected by new lifetime and annual allowances so that both can take financial advice on their positions.