TPR to ‘look at’ development of drawdown products in master trusts

The Pensions Regulator (TPR) has observed drawdown products being developed by master trusts and plans to “look at” their development over the course of next year.

Speaking at the Work and Pension Committee (WPC) inquiry into pension freedoms, TPR executive director for regulatory policy, analysis and advice, David Fairs, said that the regulator would work with the Financial Conduct Authority (FCA) on the lessons it had learnt regarding drawdown.

“What we are seeing in master trusts is that they are now developing drawdown products within the master trusts themselves, so that then comes within our remit,” Fairs stated.

“It is something that we plan to look at in the course of next year. We will be working very closely with the FCA on the lessons they have learnt around drawdown, but its a relatively new concept in master trusts.”

The committee questioned Fairs and FCA executive director - markets, Sarah Pritchard, about a series of topics around pension freedoms, including scams, collective defined contribution (CDC) schemes, advice and dashboards.

Speaking on scams, Pritchard reiterated the FCA's desire for paid-for advertising to be included in the scope of the Online Safety Bill, which has also previously been called for by the WPC and Treasury Committee.

“We would like to see paid-for advertising brought within the scope of the Online Harms Bill,” she said.

“We remain of the position that we think it is important that individuals are protected by more active measures through the Online Harms Bill, but also through better informed consumers about the steps they can take to protect themselves from scams.”

Pritchard added that the FCA is planning to commence a “multi-year digital campaign” on the dangers of investment harms, later this year.

When asked about the wider implementation of CDC schemes, Fairs noted that risks needed to be addressed before CDC was introduced to master trusts.

Both witnesses were asked about PensionWise take up, and what percentage of savers using the service would be seen as a good proportion, with neither able to give an exact figure.

However, Pritchard noted that the FCA may be open to a trial of auto-booking appointments to assess whether it would be workable.

Finally, on dashboards, both were positive on the increased engagement and pot-finding service it would allow for savers, but Fairs warned against dashboards being able to facilitate consolidation at the click of a button.

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