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Employer > Trustee Zone > OPS Matters > The next episode - TPR unveil a new series of guidance notes
The next episode - TPR unveil a new series of guidance notes
The Pensions Regulator (TPR) has published the first in a planned series of good practice guidance notes for trustees and employers as part of its commitment to promoting the good maintenance of DC schemes.
The first episode in the planned series focuses on retirement options and the open market option in DC schemes. This is a critical stage in the retirement planning process where your members must make an important decision. Failure to provide the individual with the correct level of support could result in them receiving an inappropriate annuity or one, which provides poor value for money.
What does the guidance say?
The Regulator’s guidance encourages trustees and employers of DC schemes to follow good practice at this stage. You must ensure that your members are aware of the open market option and should encourage them to shop around for the best option just like people would when shopping around for a new car or house.
TPRs executive director of strategic development, Chris Dobson, commented "The retirement options guidance will help employers and trustees ensure they have effective processes in place, and inform members so they are able to make the best possible choices on their retirement income."
Mr Dobson further explains "This is the first of a series of planned materials aimed specifically at helping those running DC schemes; work which underlines our commitment to promoting good practice in DC schemes."
The key points of the guidance are summarised below:
- The guidance applies to all DC schemes that are registered and offer benefits on a DC basis. It does not apply to GPPs
- You should identify and emphasise to members the advantages of obtaining financial advice
- Schemes should have a process in place to help members who want to convert money purchase funds into an income
- As an alternative to the above, the member can take an open market option. It is, therefore, important that you establish the best approach for your scheme and your members
Click here if you’d like to read TPRs full guidance.
Next steps
Over the coming months, TPR will be issuing further guidance on the following topics:
- Questions and Answers on DC schemes
- Communicating with members guidance, good practice examples and case studies
- DC scheme returns analysis
- Investment practices guidance
We will, of course, provide a summary of each of these guidance notes after they have been published.
In addition to reading this series of guidance notes, TPR recommend that trustees sign-up for its e-learning programme, which covers a wide range of topics. If you haven’t already signed-up, this can be achieved through the following website;
www.trusteetoolkit.com.The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice.
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