Towers Watson research is reporting that less than half of employers plan to offer a drawdown option as part of their pension plan.  Regardless of organisation plans, the survey also found that 87% of employers believe their staff will still want access to some or all of their pensions using the new drawdown flexibilities after the age of 55.

Some pension plans are reluctant to offer drawdown because many believe the management of drawdown is far too difficult, aside from the fact that there are governance issues and barriers to adoption.  Currently, many trust-based schemes are still targeting annuity purchase for their default.  Over half of trust-based schemes haven’t even rolled out targeted communications to members 55+ since these new pension rules came into effect.  HR experts warn that without communication, some people won’t know what their options really look like.

Ultimately, the ability to use drawdown is just as important as the option to purchase an annuity for many members.  Unfortunately, there are some obstacles that make it a bit more challenging to make the new drawdown rules work in practice, but change is inevitable.  Whether this change was rushed or not is irrelevant, it’s now time for employers to adapt.