The introduction of new decumulation investment strategies has been delayed by the U.K. financial regulator amid the coronavirus disruption.
Defined contribution providers were set to introduce new decumulation strategies aimed at participants looking to draw down their retirement pots to the U.K. market starting Aug. 1. The strategies — known as investment pathways — aim to give defined contribution plan participants a wider choice of decumulation options at retirement.
However, the implementation of pathways was delayed six months by the Financial Conduct Authority Tuesday; the agency cited market disruption caused by the coronavirus pandemic.
The new options — one for participants ready to receive an income and one for those who want to continue to be invested during their retirement until a later time — are in addition to lump sums and annuities. They are aimed at participants selecting drawdown without advice.
DC providers should take the time to discuss the implications of changing decumulation strategy under the current circumstances with participants instead, the FCA said.