Govt urged to permit digital statements in statement season proposals

The Pensions Administration Standards Association (Pasa) has argued that digital statements should be “permitted and encouraged” as part of the government's proposed statement season.

In its supplementary report on the proposals, the group outlined five recommendations in key areas that it suggested could "determine the overall success of the project", warning that there is “considerable concern” within the industry around these issues.

In particular, the group recommended that digital statements be encouraged as part of the statement season, noting that the strongest industry objections on the statement season proposals has been based on the requirement for paper-based statements.

It warned that this could risk undoing recent progress on encouraging savers to use digital communications, counter the current policy of minimising environmental impact, and add significant cost to the issue of benefits statement.

Indeed, the working group estimated that a typical master trust with around 120,000 savers, for instance, would face a cost of £120,000 to provide paper-based statements compared to digital statements cost of £12,000, a ten-fold increase in cost.

In addition to this, the group reiterated its recommendation that the statement season be aligned with the pensions dashboard, suggesting that the ‘as at’ date used as a basis for the statement season information should align with the approach being suggested for pensions dashboards.

The paper also brought attention to issues around the timing of the proposals, warning that any requirement for a statement season must consider other time-critical pension projects.

In light of this, it suggested that “ideally” the first season would launch in Autumn 2023, to allow administrators to test their operations before going live.

“An early launch of a statement season could compromise the ability of administrators to effectively manage other recent and upcoming policy changes during 2022, including new rules on transfers out, production of simpler annual benefit statements, dashboards compliance and the upcoming nudge to guidance,” it said.

“If these projects aren’t managed well, there could be a negative impact on savers’ trust and willingness to engage with pensions.”

The group also recommended that the statement season last a 3-month period, to allow for a better saver experience and ease the concentrated period of overload that could otherwise fall upon trustees and administrators.

It also suggested that this period could span from September to November, highlighting this as “the most workable for the majority of schemes”.

Pasa Benefits Statement Working Group chair, Helen Ball, said: “Pasa recognises the importance of the government’s wish to increase saver engagement and is supportive of the aim to draw saver attention to their pension savings on a regular basis.

“There are some crucial decisions around the placement of the statement season within the existing calendar year and the mode of delivery (paper versus digital) which could determine the overall success of the project.

“There’s considerable concern in the industry around these issues, which must be taken into account when the final proposals are put forward for consultation.

“This paper provides constructive suggestions to help government meet its objectives and increase saver engagement with, and levels of confidence in, pension savings.”

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