The U.K. government must communicate with the industry and clarify issues around its pledge to increase freedom and choice in defined contribution plans to help the money management and pensions industry in general to avoid causing "fear and confusion," says the National Association of Pension Funds chairman.
Ruston Smith, chairman of the U.K. association for workplace plans, was referring to changes to the pension industry that will remove the requirement for DC participants to purchase an annuity and allow them to access their savings with more freedom. Participants will also be entitled to free guidance. The changes take effect next April.
"There's no denying that the proposition is exciting and compelling for savers," he said. "But for those of us at the sharp end who have to deliver, this April is not far away."
To demonstrate the point, the NAPF projected a digital clock behind Mr. Smith, showing the days, hours, minutes and seconds to the go-live date.
"The problem is, we just don't know enough about the detail: this lack of detail and clarity is severely limiting our opportunity to get things right for our members. And it's increasing the risk of failure," he warned.
While the government has "rightly" set high expectations of the industry to deliver on these changes, "it is closing down the time we have to respond to make this a real success."
Mr. Smith asked the government to "help use to give freedom and choice, not fear and confusion."
