With up to 11 million people being enrolled into a workplace pension scheme – many for the first time – the Minister for Pensions has published a call for evidence on how work-based schemes are managed, with a view to setting out standards to protect members.
Looking at the quality of defined contribution (DC) pension schemes, the government has asked the industry for evidence on the current state of pension scheme governance, default options, administration and record-keeping, and scale of schemes.
Minister for Pensions Steve Webb said:
"When people choose to pay into a workplace pension few will have actively chosen the scheme they join. They trust the people managing their pension to be doing everything they can to ensure they receive a decent return when they retire. While we know standards in DC schemes have been improving, we want to make sure all pension providers have key quality standards in place to protect their members."
Responses to the call for evidence will inform the development of a set of minimum legislative standards. The government is seeking views on:
- ways to ensure that people running pensions schemes have the skills and knowledge to be able to act in members’ - - interests and for conflicts of interest to be properly managed
- standards for the design and selection of default options
- how schemes administer members’ pension pots
The publication of ‘Quality Standards in Workbased Defined Contribution Pensions Schemes’ is part of wider plans to reinvigorate workplace pensions. The proposal to set standards follows the recent announcement on movement of small pension pots when people move jobs. Automatic transfers will help people keep track of their pension savings and build up a larger retirement fund.
In May it was announced that consultancy charging will be banned and that the Department will consult on wider charges once the OFT have conducted their report.
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