The pensions industry has seen significant change over the last 25 years, with further material challenges, both short-term and long-term, already on the horizon including the revival of the Pension Schemes Bill and its many implications.
To meet these issues head on, Eversheds Sutherland has today (12 February), in conjunction with research company, Winmark, launched a new report: The Future of Pensions.
The report acts as a roadmap for pension policy makers and society as a whole. It tackles the unique challenges currently facing future generations and provides innovative ideas to the ultimate pensions questions: How do we get people to save enough for an affordable retirement, and how can we provide better financial options for retirement?
The report includes an “innovation checklist” of ideas to ensure a better retirement for all, suggested by the senior pensions industry professionals who took part in the research exercise, and on which over 350 participants were then surveyed.
The report’s innovation checklist lists the 18 solutions in order of popularity, with the top five as follows:
- Annual pensions statements that show actual annual income at retirement
- Accelerated development of the pension dashboard
- A savings and pension planning ‘rite of passage’ for young people
- Extending auto-enrolment to the self-employed
- A greater role for IFAs, through the introduction of safe harbour legislation
The innovations relate to the four principal themes covered in the report, which came out of the global legal practice’s research process:
- The future of Defined Benefit (DB) – facilitating a “safe landing”
- The future of Defined Contribution (DC) – better coverage, adequacy, consolidation and decumulation (converting pension savings to retirement income)
- The future of long-term pensions: planning and collaboration
- The future of pensions: engagement and communication
Francois Barker, head of pensions at Eversheds Sutherland, and Partner who commissioned the report, said:
“The Future of Pensions is a huge and urgent topic.
“By focusing on the four key themes identified by our report we have been able to better understand and suggest some innovative solutions for each, as well as capture and incorporate the views of our international colleagues on where the UK may have lessons to learn from overseas jurisdictions, and vice versa.
“The ‘innovation checklist’ of ideas makes for particularly interesting reading as these are some of the solutions, if correctly implemented, that will make the Future of Pensions a better place for all of us. Without a combined effort to tackle these issues by both government and society, whole generations face the threat of simply not being able to enjoy an affordable retirement.
“The pensions landscape remains in a state of flux but what is clear is that we need to transition to a range of new and effective models to ensure that pension provision for the future is adequate and fit for purpose – for all generations of savers, and all groups in a diverse society.”