Time is running short. Regulators must provide detail on how to implement DC reform

In February 2014, NAPF member research revealed that 81 per cent of respondents, across both business and pension scheme members, agreed the volume of change expected over the following 12 months would adversely affect the level of service they were able to provide.

The government must be joined up when setting deadlines for reform and think carefully about the cost burdens 

And this was before the sweeping pensions reforms introduced by the Budget 2014, or the announcement that a 0.75 per cent charge cap would apply for all qualifying DC schemes − both of which pension schemes need to have prepared for by April 2015.

While regulation provides the framework within which DC pensions work, it is not surprising that such a raft of regulatory changes, all within a short timeframe, can seem overwhelming, as there is a great deal that schemes now need to do.

Ahead of April 2015, pension schemes must review their investment strategy to ensure it can adapt to the unpredictability introduced in the decumulation phase by the Budget reforms. Member communications must also be adjusted to reflect clearly the changes introduced by the Budget.

Schemes must also consider how to help their members turn pension pots into a retirement income and what to do with those individuals who do not make a decision.

So there is a great deal of work to do in a very short time – less than 250 days until the reforms take effect.

The NAPF has argued that the speed of change is too great and inadvertently puts scheme members’ interests at risk. So what should the industry and government do to help ease the burden for DC pension schemes?

The NAPF has been lobbying the Department for Work and Pensions and the Pensions Regulator to provide clarity on the detail of reforms and guidance to trustees on their responsibilities regarding members’ decumulation as soon as possible.

The Treasury responded to the 'Freedom and choice in pensions' consultation in July, but we are yet to see how the detail will be implemented, and the Financial Conduct Authority is currently consulting on the standards of the guidance service.

The industry is already completing the important task of delivering auto-enrolment and getting the UK saving again, and will do all it can to implement these changes without member detriment.

But, the government must be joined up when setting deadlines for reform and think carefully about the cost burdens these regulatory changes place on schemes. 

Richard Wilson is policy lead for DC pensions and investment at the National Association of Pension Funds