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Pensions illustrations to be given annually in new legislation plans

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An important new tool to help people plan for a secure and
comfortable retirement is being launched by the Government.

The Government is due to introduce legislation next year that will mean people with money-purchase occupational pensions, personal pensions and stakeholder pensions will be given an illustration each year outlining what they are likely to get when they retire.

Social Security Minister Jeff Rooker today launched the consultation paper prepared jointly by the DSS and the Faculty and Institute of Actuaries. It sets out how pension providers will have to calculate illustrations.

Mr Rooker said, "People need as much information as possible to plan for their retirement. They want an annual piece of paper that will give them a good idea - in plain English and with meaningful figures - of what they will get from their pension."

"The difficulty with money-purchase schemes is the lack of certainty about how investments bought from the contributions will perform in the future. Providing illustrations in such circumstances is a challenge but one that is important to meet for the sake of tomorrow's pensioners."

"I am grateful for the work put in by the Faculty and Institute of Actuaries, which chaired the working party that developed these proposals. We now want to consult with the industry and get it right," Mr Rooker added.

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