More DB schemes are giving members access to additional support around retirement decisions according to the latest survey from Aon.
It found 37 per cent of DB schemes provide, or shortly plan to provide this support, be it through online modellers or access to financial advice. This percentage has consistently risen since 2019.
The survey also found that over half the respondents currently provide, or shortly plan to provide, members with transfer value figures in their retirement packs.
Aon has been tracking this, alongside other factors in its member options survey, the sixth year it has collated this data from over 300 UK DB schemes.
Aon parnter, and head of member options Kelly Hurren says: “In this year’s survey results there is a clear continuing trend of schemes providing members with more support when making retirement decisions – all helping to build a more resilient workforce. Schemes doing the bare minimum of just responding to transfer requests on a statutory basis are very much in the minority.”
She adds: “While most schemes now provide transfer value figures in retirement packs, it’s encouraging to see that many schemes go further and provide members with educational tools or access to an IFA to help them understand that information. We have seen the proportion of schemes taking this approach nudge up by 4 to 5 per cent each year and, based on this trend, our expectation is that we will get to a place in the next few years where around half of all schemes are offering educational tools and/or IFA support.”
Aon said that where IFA advice is provided, it is paid for by the scheme trustee or corporate sponsor in the majority of cases (63 per cent). There has however been a small shift towards advice being paid for solely by the trustee, or shared in some way between the trustee and the sponsor.
However, fully paid-for advice saw a slight reduction from last year’s survey, continuing the trend from 2022. This year, 25 per cent of schemes said they provide access to a preferred IFA but members are expected to meet the cost themselves. This though is usually at a much lower cost in comparison to ‘high street’ prices because the scheme has paid to set-up and educate the IFA on the scheme’s benefits.
This year’s survey also showed that where schemes are targeting buyout, trustees are increasingly considering the support available to members compared with what would be available from an insurer. This includes access to modellers or IFAs and different options such as pension increase exchanges (PIE) or bridging pension options (BPO).
Among the schemes in the survey, 30 per cent are planning to write to members on a bulk basis before buyout, with the aim of reminding them of their options and of the support available – before it changes irrevocably for them.
Hurren adds: “A key consideration is that after a buyout transaction, member options and access to support will change. If schemes are heading towards an insurance transaction, trustees increasingly view it as good governance to communicate with members about their options before they change completely following the transaction.
“This is particularly true where schemes have made strong support available to members – such as IFA guidance or educational modellers – which wouldn’t be available after buyout.”
The survey showed that just under 25 per cent of the schemes surveyed place a high importance on member options/support when considering possible buyout dates. Currently, only 4 per cent of schemes would actually delay a transaction in order to retain support or options for members, but 19 per cent of schemes would hope to retain some of this support after a buyout.
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