PASA highlights practical aspects of 'guided retirement’ in new report
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New guidance by the Pensions Administration Standards Association has been published to explain how incoming ‘guided retirement’ duties on pension schemes will change the administration of defined contribution pension schemes, calling on schemes to involve administrators early in the process of creating these pathways.
A new duty on pension scheme trustees of DC schemes to provide a ‘default pension benefit’ that offers regular income will become law once the pension schemes bill has passed. Master trusts will be the first expected to provide such default pathways, starting next year. Single employer trusts and group personal pensions will follow in 2028.
PASA said the guidance focuses on the practical aspects of delivering the new policy and highlights the scale of change needed across systems, processes and governance frameworks.
“While the policy intent is strongly supported, delivery will be complex,” said Jessica Rigby, who chairs PASA’s DC working group. “Many existing administrative processes were not designed for ongoing retirement journeys or income provision, and significant change will be required across systems, data and operations.”
Rigby said early engagement between trustees, administrators and providers will be “critical” to deliver scalable solutions. “Without this, there is a real risk operational challenges could constrain what can be achieved in practice.”
PASA chair David Fairs said administration sits at the heart of delivering policy intent and supporting savers.
“The industry has an opportunity to demonstrate its strategic value, but this requires realistic planning, investment and collaboration,” he said. “Administrators must be involved early in decision making to ensure proposed solutions can be delivered effectively and sustainably.”
