Employers need to up their game by giving better support to their DC pensions scheme members affected by the changes to the Lifetime Allowance (LTA) and Money Purchase Annual Allowance (MPAA) announced back in March in the Spring Budget, warns Hymans Robertson. The leading pensions and financial services consultancy made the call after a poll of a representative group of employers during a recent webinar found that three quarters (74%) did not have support in place to help members make choices that would be right for their circumstances.

Although nearly two thirds (62%) of firms polled said they have a policy in place for impacted employees, only a quarter (26%) plan to provide decision-making support to them. This contrasts with around 60% who plan to communicate the changes to workers and review their default communications on the topic.

Commenting on the gap in employers’ plans, Susan Waites, Partner, Hymans Robertson, said:

“Communications are helpful and informative but don't always result in members making the right decisions for their own individual circumstances. Some of the decisions potentially influenced by the Chancellor’s changes will be life-changing, such as older professionals choosing or not to stay in work. Other important decisions affected will include how much to save into a pension, whether to re-start saving, or opting for a cash in lieu of a pension.

“So, employers need to realise their responsibilities by giving additional support such as webinars, access to guidance or even financial advice. That way members will be empowered to make the most of the new opportunities such as the increase in the MPAA and the abolition of the Lifetime Allowance.”

“At the same time employers should be making sure that all communications for employees reflect the new changes and that they keep the structure of group life arrangements under review. By doing this, employers will be increasing the chances of member getting the best outcomes they can in retirement.”