The two model PBS’s were developed to guide pension funds in implementing the communication requirements under IORP II. Both model statements published were for DC funds – this could be due to the increasing trend that we see in Europe towards DC funds, as well as the higher level of uncertainty associated with the benefits expected in these funds. We expect that EIOPA will also release additional guidance on a model PBS for DB funds.
The model PBS’s are voluntary and only serve to provide funds with a base from which they can develop their own benefit statements by showing the minimum required information. Funds could adapt these by incorporating any fund specific characteristics and country specific elements, as well as applying their own design elements.
Although both model PBS’s contain the same information, they use different styles of communication in terms of the colour, visuals and the illustrations. The different model PBS’s demonstrate how a PBS can be designed differently and still communicate the same message.
The model PBS’s align with the principles published by EIOPA, with the following features:
- The information is presented in a clear and concise way.
- Illustrations and other visual aspects are used to make it easier for members to understand their pension benefits.
- The introduction of the best estimate, favourable and unfavourable scenarios give members better understanding of the variability associated with their pension benefits.
- There are sufficient disclaimers highlighting the limitations of the information provided, and that actual amounts can turn out to be different than the projections.
- The cost deductions are clearly indicated (more detailed in PBS 1 thank in PBS 2).
- There are links to different websites for additional or more detailed information, makes it easy to navigate.
The standardised PBS ensures that the information provided to members is consistent so that members in different funds and countries get comparable information. It also serves as a tool that could potentially result in members being more active and involved with their retirement planning.