The NAPF has responded to the consultation being conducted by the Independent Review of Retirement Income commissioned by Labour's shadow pensions secretary, Rachel Reeves.

The NAPF welcomes the contribution being made by the Independent Review of Retirement Income (IRRI) to the debate about what good looks like for pension savers reaching retirement with DC pensions and how best to help pension savers achieve a good outcome in retirement.

The new choices being made available to pension savers from April 2015 (Freedom and Choice), either at or before retirement, present both opportunities and challenges for the pension sector and a wider range of benefits and risks for pension savers. In considering how best to address the challenges and risks, it is certainly worth asking the questions about how best we can help savers achieve the best and most appropriate outcomes from their savings.

The NAPF response highlights three key risks, namely:

• The risk that we lose sight of what a pension is for and what a good retirement income outcome looks like.  Recent policy changes have diverted attention away from the central role that pensions play, and which savers want them to play, in ensuring financial well-being in retirement. There is a need to re-focus messages to pension savers and the wider public about the central role of pensions being the delivery of an income in the period of retirement from paid work.
• The range of risks that pension savers face from the extended choices available to them in a market that is not yet fully developed and will, in April, still be adjusting to the newly published legislation, regulation and guidance that facilitates Freedom & Choice. The NAPF advocates the creation of ‘safe harbour’ retirement income solutions that meet  high threshold quality standards around governance, communication and investment and income structures, as well as providing some safeguards for later life and some flexible access. The development of safe harbour solutions would enable trustees to signpost their members with confidence to solutions either within our without their own scheme, thereby reducing the scope for poor outcomes for their members.
• The political risk of constant intervention in pensions policy undermining the very innovation it seeks to stimulate. There is insufficient stability in key elements of pensions policy to enable savers to plan effectively or the industry to invest with confidence. The NAPF has called for the establishment of an independent Retirement Savings Commission to focus on the long term, to define what good looks like, to measure progress towards those outcomes and to support Government in developing evidence-based policies which drive towards those outcomes.