TPR publishes guidance on ‘stronger nudge’ to Pension Wise appointments

The Pensions Regulator (TPR) has published new guidance for trustees of defined contribution (DC) pension schemes who will be in scope of the ‘stronger nudge’ regulations coming in June 2022.

Under the new regulations, DC scheme trustees will be required to offer to book their members an appointment with Pension Wise when they apply to access their flexible benefits.

TPR noted that the way trustees include the requirements in their member retirement journeys was up to them to decide so they retain some flexibility in how they engage with members.

Trustees have been told that they must not proceed with the member’s application to access flexible benefits until they have confirmation from the member that they have received guidance or have opted out of receiving guidance.

TPR suggested that it was good practice to offer to book a Pension Wise appointment as early as possible in the process.

Furthermore, the regulator noted that trustees need to ensure their processes are updated to include the requirement to book a Pension Wise appointment.

If a member wished to stay in the scheme and access their flexible benefits but do not wish to receive Pension Wise guidance, they must provide the opt out in a separate communication, for example a further telephone call or an online opt out form.

If a member does not provide an opt out notification or confirmation they have received Pension Wise guidance and they contact the trustee again with an application, the process must begin again.

As long as certain criteria detailed in the guidance are fully met, trustees have permission to choose which forms of communication best suit their members.

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