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Time to wake-up?
The Association of British Insurers (ABI) has released updated guidance to help providers improve the quality of wake-up packs which are sent to defined contribution (DC) scheme members as they near retirement. The new guidance follows on from the wake-up guidance which first made its debut back in 2008 after taking industry feedback.
Wake-up packs are generally issued to customers in the four to six month timeframe before their selected retirement date. However, instead of waking you up like your trusty Monday morning alarm clock, the packs wake customers up to the fact they have the right to shop around for the best deal at retirement. In principle, the packs should set out in clear and simple terms what options are available and how the customer has the right to use the open market option (OMO) to shop around for the best deal. In this respect, shopping around at retirement should be no different to shopping around for a new car or that bargain summer holiday deal.
Following extensive customer testing of the packs, the updated guidance focuses on the following key components of communicating the OMO and retirement choices:
- clear prompts for customers about the importance of reading the pack,
- greater emphasis on the importance and benefits of shopping around,
- a clear timeline for taking benefits,
- and new standards to improve the OMO transfer processes.
The initial guidance from 2008 had great results in terms of the output and quality of providers’ wake-up packs. The ABI hope that this latest update will raise standards even higher.
Published 15 December 2009
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