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Companies face 'nightmare' delivering pensions advice


The chancellor's announcement that everyone with defined contribution (DC) pension schemes will receive face-to-face advice by 2015 will be difficult to deliver on time, according to independent trustee and governance services provider Pitmans Trustee Ltd (PTL).

Guaranteed impartial advice that follows a set of robust standards from April 2015 is a key part of the Government's pension reforms.

However PTL managing director Richard Butcher cast doubt on the feasibility of delivering this on time, accusing the Government of creating a "timeframe nightmare for DC trustees". He also questioned where the finance for these extra consultations will come from. 

Butcher believes the sheer scale of the work will cause the most problems. "Come April 2015 we can expect 300,000 to 400,000 DC retirees a year," he said. "It will take, I estimate, at least 1,000 guides to help these people. Where will they come from?"

He added that the need for all advisers to demonstrate the robust standards the Government requires make the timescales unworkable. 

The views were echoed by National Association of Pensions Funds (NAPF) policy lead Richard Wilson. He told HR magazine the face-to-face consultations would be especially difficult to deliver in remote areas. He added that, after auto-enrolment, this was another area that might stretch SMEs more than large corporates.

But despite the challenges, Wilson said these changes will have to be forced through one way or another.

"Not delivering these changes in the next 12 months isn't an option," he said. "How they will be delivered or how they will be funded going forward is another matter. Leaving the burden on employers is not feasible. A more concrete plan is needed but at the moment it's not clear what that will be."