The government should remove overly-prescriptive rules governing the type of pensions companies must offer and the way they communicate with their scheme members, the National Association of Pension Funds said today.

In its response to a call for views on pensions regulation issued under the government's Red Tape Challenge, the NAPF said 'streamlining' regulation could find a balance between protecting scheme members' interests and avoiding unnecessary regulatory burdens on employers.
Joanne Segars, NAPF chief executive, said: 'We need a regulatory system that protects members' interests, whilst also supporting good quality workplace pensions.
'Getting a positive outcome from this Red Tape Challenge would pave the way in opening up a spectrum of options for better sharing of risk between employers, individuals and the state, very much along the lines of the pensions minister's "defined ambition" approach.
She added: 'We need to rethink if we are to have a system that works for members, employers and schemes, and provides good quality workplace pensions to future retirees.'
In particular, the NAPF called for an end to the statutory requirement for pension rights accrued in the future to be index-linked to inflation. The cost of running defined benefit schemes has escalated over the past 30 years, the NAPF said, and removing this requirement would help many employers to move to a more sustainable DB scheme model.
Rules restricting the ability of trustees and employers to make changes to their scheme should also be addressed, it said. In particular, restrictions put in place under Section 67 of the Pensions Act 1995 act as a barrier to making improvements to a scheme which would have only a 'marginal' impact on individual members.
Based on responses to the call for evidence it issued in order to compile its response, the NAPF said smaller schemes in particular felt the Pensions Regulator placed disproportionate burdens on them in relation to compliance and governance.
Schemes had particular concerns over the time and effort they spent on record keeping and in relation to the data exchange and appeals processes for multi-employer schemes.
They also found current disclosure and communications requirements to be overly-prescriptive, and called for more focus to be placed on 'trusting the trustee' or scheme manager to communicate with their members.
The NAPF said, however, that any cost or administrative benefits from the Red Tape Challenge could be cancelled out by the potential impact of plans to equalise Guaranteed Minimum Pensions.
Ms Segars added: 'Any benefits from the government's Red Tape Challenge could be undermined if the government presses ahead with its plans to equalise Guaranteed Minimum Pensions at a cost of £13bn. The government needs to explain its case for GMP equalisation and publish its legal advice.'
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