PLSA comments on ABI's Five Years On: Future Proofing the Freedoms report | Pensions and Lifetime Savings Association

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PLSA comments on ABI's Five Years On: Future Proofing the Freedoms report

25 February 2020

The Pensions and Lifetime Savings Association (PLSA) comments on the Association of British Insurer’s Five Years On: Future Proofing the Freedoms report

Lizzy Holliday, Head of DC, Master Trusts and Lifetime Saving at the PLSA, said:

“We welcome the publication of the ABI’s Five Years On: Future Proofing the Freedoms report.

“The pension freedoms offer savers flexibility and choice in how they access their retirement savings, but also present significant risks that need to be managed to ensure savers receive good outcomes. To achieve this, it is essential that savers have access to appropriate guidance and advice arrangements, and we are pleased to see that this is a major focus of the ABI’s report.

“However, we do not believe that the FCA’s investment pathways are an appropriate solution for occupational pensions – they are a solution to a specific issue in the contract based sector. There are differing drivers, protections and benefits for savers in trust based schemes.

“We anticipate that consumer needs will change as automatic enrolment (AE) evolves, pot sizes increase and DB entitlement becomes rarer. As AE was designed to rely on inertia, it is not clear the investment pathways solution will be appropriate for future cohorts of retirees, who may require different levels of help and support to current retirees.

“To satisfy these needs, we believe a more comprehensive approach is required in the long-term and that the trust-based sector is well-placed to deliver it. We began exploring these issues in our Hitting the Target report in 2017, and will be setting out new proposals in the coming months.”

ENDS

Mark Smith, Senior PR Manager
 020 7601 1726 |  [email protected]k

Steven Kennedy, PR Manager
 020 7601 1737 | 07713 073024 | [email protected]