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The Personal
Accounts Delivery Authority (PADA) may launch an annuity provider
panel to provide future members with simplified access to retirement
products.
At the launch of PADA’s consultation on decumulation, Securing
retirement income, Tim Jones, chief executive of PADA, said that
the single biggest issue for the first decade of Personal Accounts,
following introduction in 2012, was tackling small pension pots.
He said PADA were working on how to make sure there are no ‘stranded
pots’, and that everyone can get access to their benefits.
The proposal will present an opportunity for a number of annuity
providers to work with PADA, and members of Personal Accounts can
interact with both parties in easy to understand ways. The aim would
be to simplify the buying process for Personal Accounts members,
who do not choose the open market option. However, PADA expects
it to be as competitive as a product on the open market.
“This is the new, and arguably biggest novelty or difference,
that you will find in this consultation”, Jones said. However,
he was quick to stress that this was not a proposal for self-annuitisation
or of bulk buying annuities. “It is our way of achieving zero
stranded pots”.
The consultation itself covers securing a retirement income; choosing,
buying and the provision of annuities; and the possibility of taking
some small pension pots as a lump sum.
The consultation will run for 13 weeks from today (2 December 2008),
until 4 March 2009, with a summary expected by 4 June 2009.
Jones added that there are two more consultations scheduled for
next year, due around the March and April, the investment strategy
consultation paper and their scheme order and rules, published jointly
with the Department for Work and Pensions. “As far as we are
concerned, that will complete the PADA formal consultations,”
said Jones.
- Pensions
Age December 2008
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