The Department for Work and Pensions (DWP) has confirmed plans for a further consultation on defined contribution (DC) decumulation, focusing on the communications journey, “in the next few months”.

Speaking at the PLSA Annual Conference 2023, DWP head of policy collective defined contribution (CDC) and DC decumulation, Julian Barker, shared early insight from the government’s consultation on plans for a new policy framework for supporting individuals on how to use their private pension savings at the point of access.

He stated; “We had a great response, with over 70 contributions, and we're currently reviewing those responses.

“There was definitely consensus on the principle of placing duties on trustees to support decumulation decisions and through the offer of products and services.

"Most respondents were also clear that there was a a good link between that and the holistic communications journey that would help engage members and help support them through their pension savings and retirement."

Barker confirmed that there was also a common view that action was needed, clarifying that while "there are lots of schemes that are doing really, really good things in this area and we know that there's new products and new services being developed all the time", there is still room for improvements.

"We also know that the coverage across the membership is very patchy and in trying to bring the standard up, there was definitely consensus that we would need to take some sort of action as government to help drive that sort of change," he continued.

However, Barker revealed that there was less agreement on other matters in the call for evidence, particularly about the use of defaults and the role of CDC in decumulation.

"There are also some practical considerations raised about partnering, including things like where liabilities lay, if things went wrong, etc," he continued.

“So we're building on what we've been told and we'll be making our position clear on the way forward in the next steps most likely I would expect in the next couple of months."

Barker also confirmed that DWP will be following up with a further consultation on the communication journey that will support members.

"The consultation we did in July was very much focused on the products and services at decumulation," he explained, "and to my mind it makes sense first to focus on what you're trying to get to in terms of schemes and products and services, and then if you look at what is the best way of supporting members to actually get there.

"So that consultation will be launching in the next few months, we'll also deal with those other issues that came out with the call for evidence."

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