Government red tape hampering drive to deliver clearer pension statements, says ABI

The ABI says its members are being hampered in their ability to deliver clear yearly pension statements by a burdensome regulatory regime which forces companies to use irrelevant information.

The accusation follows criticism of some pension statements made last month by Graham Mannion, managing director of portfolio information company PensionDCisions, who highlighted the inability of the great majority of pension providers to give a single figure for an annual percentage return of a scheme member’s portfolio.

The ABI says it has been at the forefront of attempts to improve the clarity and quality of yearly pension statements and that the Customer Impact Scheme Good Practice Guide on Yearly Statements published in October 2006 should be driving clarity in terms of language.

It argues that providers are forced to include information which is not strictly relevant or useful to the consumer and has had discussions with the DWP, HM Treasury, FSA, Board of Actuarial Standards and the Pensions Regulator on the issue.

Maggie Craig, director of life and savings at the ABI, says: “We acknowledge the concerns over the usefulness of yearly pension statements, and are taking action to improve them. But this can only be done effectively if the Government agrees to remove the excessive regulations which dictate to pension companies much of their content and how they must be presented.

“We have had productive discussions with the Government and regulator on this and we hope action will be taken soon.

“The changes we want are in line with the FSA’s drive towards a principles-based regulatory regime. The Government should use the Pensions Bill, due later this year, to make these changes and we strongly urge it to do so.”

Fidelity says that its pension statements do contain an annual statement of the total return for a client’s portfolio.