RQM: Driving up standards or duplicating regulations?

The freedom and choice reforms introduced in 2015 have left consumers in charge of how they want to use their pension pots, with many opting for drawdown – whereby the assets remain invested and are gradually used up, while any remainder can be passed on.

Seven years after introducing the Pensions Quality Mark for the accumulation phase, the PLSA is following up with a decumulation standard “to raise confidence in the at-retirement market”, the association said.

At the launch event this week, Adrian Boulding, chair of the Pensions Quality Mark family, said the RQM standards cover both trust and contract-based schemes, and outlined some of the criteria, which include include warning clients if they are in danger of over or underspending, and tailoring communications to consumers' age.

Boulding said as well as to consumers, the new set of standards “will also provide reassurance to employers and trustees”.

The Pensions Regulator’s chief executive Lesley Titcomb, speaking at the event, endorsed the RQM, saying it should contribute to driving up standards in the at-retirement market.

“We hope the RQM will give consumers and trustees confidence when choosing a product,” she said, adding that the best trustees will always go a step further in providing good quality schemes.

Responsibility question unresolved

However, it is unclear how responsibility is shared in awarding the RQM. While Boulding said he hopes there will be signposting, the RQM legal statement absolves it of being seen as a recommendation, and states it “should not be relied on” when entering into any contract.

Trustee chair of the Trinity Mirror DC scheme, Laurie Edmans, who was in the past involved in creating the SHIP standards for what is now the Equity Release Council, said the RQM duplicates regulation without taking responsibility.

"I'm a bit wary of people setting themselves up as quasi regulators," he noted.

He added that he believes the intentions behind creating the mark are “absolutely sound”.

However, “it feels a bit like an attempt to get people to the point where they have the same kind of protection that regulation is supposed to bring, but without anybody taking any responsibility for it at the individual level”.

Edmans said he would prefer an approach that emphasises and appreciates the value of personalised advice.

“People are vastly different when they get to retirement age. How are the differences of an individual taken into account?”