The Pensions and Lifetime Savings Association (PLSA) comments on the Government’s consultation, Increasing the normal minimum pension age: Consultation on implementation.
Tiffany Tsang, Head of DB, LGPS and Investment, PLSA, said: “The PLSA welcomes the intention to uphold existing protected pension ages within schemes as the new Normal Minimum Pension Age (NMPA) is brought in. We are also supportive of the additional flexibilities enabling savers to take benefits at protected ages, such as removing the retirement condition and allowing benefits to crystallise at different dates. However, these changes may have some important unintended consequences.
“Individuals may be incentivised to consolidate or transfer into a scheme with a lower protected age once the new NMPA happens, whether it’s the optimal destination scheme or not. There are also other implications, for instance, if a significant number of small pots have a protected age, it may conflict with other government policy in this area to consolidate these pots. There may also be an increase in administrative burden and communication challenges, as well as an increase in costs, to implement the NMPA.
“While the 2028 deadline to implement the NMPA is reasonable, the pensions community would benefit by Government providing a consistent set of phasing-in guidance.”