The Pensions Regulator is inviting views on how to raise standards in Defined Contribution pensions, ahead of the introduction of auto-enrolment in 2012. Auto-enrolment is predicted to see between 5 and 8 million people saving more in workplace schemes.
There are currently 2.5 million (DC) memberships in occupational pensions and 3 million in work-based personal pensions. The Pensions Regulator has published a discussion paper, Enabling Good Member Outcomes in Work-based Pension Provision. It highlights six issues that the regulator believes are key to improving confidence in pension saving. These are:
- making appropriate decisions with regards pension contributions
- enabling appropriate investment decisions
- providing efficient and effective administration of DC schemes
- providing protection of scheme assets
- giving value for money
- enabling appropriate decision on converting private pension savings into a retirement income.
A new pensions’ landscape
The Pensions Regulator’s chief executive Bill Galvin said: ‘This paper marks the start of a dialogue with the industry and stakeholders over what good DC pensions look like and how we can support the market in delivering good outcomes for members.
‘The pension landscape has shifted since we published our approach to DC regulation in 2007, and the introduction of automatic enrolment will result in a dramatic rise in the numbers of people saving in DC schemes. It is important now that we ensure our regulatory approach supports the Government’s workplace pension reforms and is designed to deal with current and future challenges as the market develops.’
Which? welcomes Pensions Regulator initiative
Which? financial services chief advocate Doug Taylor said: ‘We welcome the Pensions Regulator initiative. The difference between a good and a poor DC scheme can be massive and consumers find it difficult to exercise any control. We particularly want to see more emphasis on employers really ensuring the member is at the heart of choosing a pension scheme, that members of a scheme have better protection when they leave an employer, that schemes are value for money and charges are properly controlled.’
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