The Pension Quality Mark's Matthew Doyle makes the case for clear guidance and signposting to quality at-retirement products.
When you are faced with the conundrum of where to put your lifetime savings, the decision-making process needs to be simple – or at least much simpler than it is now.
This new quality mark will help develop a robust at-retirement market that operates in the interest of savers
The Pension Quality Mark has gone a long way in helping UK employers demonstrate the benefits of their pension offering by meeting the criteria of excellence required for the award.
Having the PQM highlights to savers that the pension scheme they are investing in has been independently verified as high quality. A number of the standards originally set by the PQM have subsequently become statutory requirements.
Pension freedoms increase need for guidance
When George Osborne announced the pension freedoms that gave savers more choice, he also presented them with a challenge: how to invest their retirement money.
It has become apparent that when it comes to making a decision on how to use the new freedoms, savers are often confused and say they want clear guidance.
Now that savers have increased options for what they can do with their retirement savings, more needs to be done to ensure they can find the right product.
RQM designed to help savers choose retirement products
To help savers, the PQM board has launched its Retirement Quality Mark. The RQM gives savers a clear line of sight to quality at-retirement products, helping them to differentiate between the variety of products or services on offer to them.
In order to help savers with the choices they face when making the most of their retirement income, the RQM will:
build on current guidance and act as an enabling tool to help consumers make informed decisions;
signal products that have met an independent quality standard in relation to governance and communications;
help build confidence in pensions and retirement saving.
The RQM will help them make the complex decisions about which at-retirement products to choose and give them confidence in their decisions, knowing that the products they are purchasing have been independently verified.
Ablility to signpost to products
The RQM will also support trustees and employers, as they will be able to signpost scheme members to products that meet the quality standards.
RQM: Driving up standards or duplicating regulations?
The Pensions and Lifetime Savings Association has launched its Retirement Quality Mark for drawdown, but some have questioned the need for the standards in their current form.
As well as helping savers to make informed decisions about which at-retirement products they buy, we expect this new quality mark will also assist in developing a robust at-retirement market that operates in the interest of savers and over time further raises the standard of the products available.
This is the first step in clearing the path for savers to have a better understanding of the quality of products available to them in the at-retirement market, and to help savers make use of the pension freedoms confidently and fully.
Matthew Doyle is managing director at Pension Quality Mark Ltd
