Workplace pension scheme are letting savers down according to The Pensions Regulator.
More than 50% of occupational pensions could be improved simply by informing their members as to what was going on.
In 30% of the 97 defined contribution pension plans that The Pensions Regulator investigated it was found that they breached retirement disclosure regulations. 6% of the 97 schemes are also now being handled by caseworkers to improve literature given to members to inform them of the pension scheme processes.
The review looked at each DC (defined contribution) scheme and assessed whether they were being run properly, including whether they were adhering to legislation. They also assessed the prominence of the open market option in the pension documents and whether or not they were going to be understood by all of those receiving them.
Experts in the field of pensions and investments always urge people to explore the open market option (OMO) and to look around for better deals instead of accepting the annuity offered by the pension provider.
Although 98% of the schemes offered the OMO, the take up was a slender 23%, probably due to the lack of information available and clarity of how OMO works.
The findings will now be distributed to the 4,500 schemes across the country asking them to revise all literature sent out to members. It is estimated that those who shop around and are aware of their options could boost their retirement funds by as much as 20%.
The major findings of the review were that better communication regarding schemes and the understanding of the many options available will give scheme holders the opportunity to take control of their pension funds. This in turn will give them the ability to make more for their retirement.