The DWP has consulted on a number of ‘miscellaneous regulations’ relating to the pension freedoms. The Pensions and Lifetime Savings Association welcomed clarifications with respect to pension sharing, scheme wind-up, inalienability, preservation of benefits and the Pension Protection Fund, which were for the most part straightforward.  We also welcomed the proposed approach to valuation of money purchase and cash balance pots to which guaranteed annuity rates attach, and made some suggestions for how the approach should play out in the regulations.

However, the Association felt strongly that the approach to retirement risk warnings needed further thought. Risk warnings should come when it is clear that a benefit is being drawn (in the form of one or more lump sums (UFPLS), drawdown or an annuity).  They should come from the scheme from which the benefit will be taken, and should describe in generic terms the risks associated with option that the member has indicated that he or she would like to take. Where the member is simply transferring to another scheme or provider, rather than directly taking his or her benefits, we do not think that yet another tranche of generic materials about all of options for taking income will serve the stated goal of protecting members.

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