After A-Day, retiring employees will no longer be forced to take income, such as an annuity or drawdown, at the same time as getting access to a cash lump sum.
Responsible employers may want to inform retiring employees of this fact so that they can work out whether it will be in their interests to delay retirement.
Alasdair Buchanan, group head of communications at Scottish Life, said: "One of the things a good employer may do is line up talks with a choice of available independent financial advisers."
After A-Day employees will have a choice of income options for the remaining part of the fund after the lump sum, to be a maximum of 25%, has been taken into account.
The secured pension means that, as before, employees in a money purchase scheme can buy a lifetime annuity, while those in a defined benefit scheme will be able to opt to buy a pension for life or an annuity out of the scheme assets.
Under the new rules there is also an unsecured pension route, which allows people up to the age of 75 years to draw down income, subject to a maximum limit, but there is no minimum limit. This effectively breaks the link between taking a tax free cash lump sum and being forced to take income at the same time. Instead of drawing down income, people can opt for a short-term annuity. Unsecured pensions are open to those in money purchase schemes like personal pensions, stakeholder pensions and free-standing AVCs, and also those in group money purchase schemes where the trustees have adopted the new post A-Day pension rules.
For those aged 75 years and above there is now an alternative to buying an annuity. They can opt for an alternatively secured pension taking income at a similar rate to current drawdown levels.
