The pension providers' body said there needed to be a statutory requirement for pension schemes to support members when making decisions about how to access their pension.
It said there also needs to be a set of minimum standards for saver communication and engagement, as well as product design and governance.
The new framework proposed by the PLSA aims to provide more support to savers who do not engage with their options as well as supporting freedom and choice for those who do.
It also aims to:
- Facilitate and influence future product development with a view to managing the risks for savers as dependency on DC-derived incomes increases
- To utilise the benefits of scales and mechanisms such as the trust-based fiduciary duty within Master Trusts and Trust-based schemes and the responsibilities of Independent Governance Committees (IGCs)
- Support a continuity of saver experiences across the market, whilst “enabling innovation to flourish”
The PLSA said the framework also aims to mitigate some of the risks both savers and schemes are facing.
The pension scheme professional body set out a vision for a new Defined Contribution Decumulation framework to members in July. Having received widespread member support, the PLSA published the final framework widely unchanged.
Emma Douglas, chair of the PLSA policy board, said: “The Pension Freedoms radically revised the journey for savers when they reached retirement, bringing new opportunities, challenges and risks to savers and pension schemes.
“The decumulation framework we are recommending today responds to the evolution of the pension system. It will provide vital support to savers and help bridge the gap between the inertia which makes automatic enrolment such a success, and the range of choices (which can be confusing) savers face when electing how to draw their pension at retirement.”