20 Jun 2014
Employers should be able to offer staff general guidance about their retirement planning without fear of being sued, the insurance company Zurich has said.
The suggestion has been made as a response to the Treasury consultation on the provision of retirement guidance, which forms part of the wide-ranging pension reforms announced in the March Budget.
The Government has committed to offering defined contribution pension savers access to ‘free, impartial, face-to-face advice’ alongside the increased freedom and control over their retirement funds.
The current consensus is that this guidance should be provided by a combination of not-for-profit organisations, such as The Pensions Advisory Service, the Money Advice Service and Citizen’s Advice.
However, Zurich proposes that employers should also be allowed to give guidance to workers about their saving plans, without fear that they can be held legally responsible for negative consequences in future years.
Gary Shaughnessy, of Zurich UK Life, said: ‘People need to make important decisions from day one of their retirement savings journey. For example, they need to understand the level of savings they need in old age, and what type of savings vehicles are best suited to their needs.
‘We believe that employers can play an important role in helping savers plan for their old age adequately. But at present this may be limited because of concerns that they could be sued, even many years after they have offered financial guidance. The Government should give employers safe harbours on their liability. This will encourage employers to play their part in helping savers reach better decisions.’
However, the lack of expertise among employers would mean that there would be a cost implication for companies in providing retirement guidance.
The Government is expected to release more information about its ‘guidance guarantee’ in the next few months.