PASA as published new Guided Retirement: Operational Readiness Guidance, designed to help trustees, administrators and providers begin assessing how ready they are to deliver guided retirement in practice.
As the pensions industry moves from policy development towards implementation planning, the new Guidance focuses on the operational changes likely to be required to support guided retirement and the default pensions developed within it.
Rather than attempting to prescribe a final solution while the policy framework is still evolving, PASA’s Guidance sets out the practical questions schemes can start asking now.
It highlights the potential need for changes including greater workflow automation, stronger system integration and data flows, clear accountability across the organisations involved, appropriate controls around automated decisions, and communications and support which extend across the full retirement journey.
A detailed Guided Retirement Readiness Checklist accompanies the Guidance, providing schemes and administrators with practical questions covering strategy, systems, data, governance, communication, risk and compliance, and delivery planning.
Jess Rigby, Chair of PASA’s DC Working Group, said: “Guided Retirement won’t simply be a product design exercise. Whatever the final framework looks like, it will ultimately have to work operationally for administrators and, most importantly, for members.
“That means understanding whether systems can support the journey at scale, whether the right data is available, who is responsible for what, how members will be supported and how retirement income will actually be paid reliably.
“We don’t think schemes need to have all the answers today. But there’s a great deal they can sensibly do now to understand their starting point, identify gaps and dependencies and make sure administration is involved early enough in the design process. Our Guidance and Readiness Checklist are intended to help them do exactly that.”
The revised timetable for Guided Retirement, with implementation now expected from 2029, gives the industry additional time to prepare. PASA cautions, however, that the scale of the operational change involved means this time will need to be used carefully.
Preparing for the new framework could require schemes and administrators to redesign processes, enhance technology, improve or collect additional data, train teams and establish new governance arrangements, all while continuing to deliver business-as-usual administration and other major industry change.
David Fairs, Chair of PASA, said: “The additional implementation time for Guided Retirement is welcome, but it shouldn’t be confused with a reason to wait. Administration needs to be part of this conversation from the outset. Decisions about default pensions and member journeys have consequences for systems, data, people, processes and ultimately the experience members receive.
“There’s an important balance to strike. The industry shouldn’t build final solutions before the requirements are sufficiently clear, but neither should it wait to understand its capabilities and the scale of change which may be needed. Starting readiness work now will put schemes in a much stronger position as the framework develops.”
The Guided Retirement: Operational Readiness Guidance is available on the PASA website.
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