The process for converting pensions into annuities could be overhauled if providers giving bad deals do not up their game says pension minister Angela Eagle.
Speaking to Corporate Adviser, Eagle, minister for pensions and the ageing
society said insurers who provided bad deals for uninformed consumers could
force the Government to change the current structure.
Eagle is also pressurising providers to speed up the time taken for pension
money to be released when consumers access the open market option, and wants
an increase in electronic capability for transactions involving maturing
Eagle says: “Those that are providing bad deals for annuities for existing
members at the moment need to be aware that that sort of structure can’t
continue. I would want every individual to know that they should shop
around. If there was ongoing evidence that people aren’t doing that and they
are getting worse results as a consequence then I would want to look to see
whether we could change the structure to ensure that the default mechanism
was a better deal.”
“We are looking at the evidence, we are seeing whether what we are doing
with open market operations is going to have an effect and if it doesn’t
have an effect then the next approach is more obvious, isn’t it?”
Pension minister Angela Eagle’s views on trust versus contract, the state of the Turner consensus and the countdown to 2012 are covered in a wide-ranging interview in the December issue of Corporate Adviser, out this week.