Nearly two-thirds of defined contribution employers and trustees believe that the guidance guarantee announced in the March Budget will fail to provide enough support for scheme members ahead of retirement.
Published today, Mercer's snapshot survey of 300 employers and trustees provides views on the future implications of the Budget, following the government's Freedom and choice in pensions consultation.
The government set out its response to the consultation on July 21, which included a promise to introduce free and impartial guidance on people's retirement options from independent organisations.
However, 62% of those surveyed by Mercer recognise the shortcomings in relying solely on the 'guidance guarantee' and realise that members will need more support.
Over a third (38%) of employers and trustees plan to simply facilitate access to the free independent guidance, while 62% said they would offer additional support, although how they intend to deliver this will vary by scheme.
Roger Breeden, UK DC and savings product leader at Mercer, said: 'Receiving generic guidance provided shortly before retirement will be useful, however, for most DC savers it will be too late. To increase their chances of getting a decent pension individuals need to make their investment and contribution choices at a much earlier stage.
'Trustees and employers need to review their communications and support to ensure employees get a full picture of the options available to them and the consequences of these early decisions. Once the changes announced in the Budget are fully defined they also need to check that all communications material meet the new requirements.'
The government's consultation response also confirmed that changes would be made to allow individuals to transfer from private sector defined benefit schemes to DC schemes.
Three quarters (76%) of those surveyed by Mercer said they expected less than 20% to transfer out and only 16% expected more than 40% to do so.
'Our experience suggests that the actual number of transfers from DB to DC would be around 30%, so not dissimilar to what our participants expect,' Breeden said.
'Such transfers, especially in great numbers, could have an impact on asset liquidity, administration processes and employer covenant, so regular monitoring and building it into risk management programmes is essential.'