Pensions - Articles - OFT recommendations could have gone further


 The OFT’s assessment of potential risks in the Defined Contribution workplace pension market is welcome but its recommendations could have gone further, argues the National Association of Pension Funds.

 In its consultation response, the NAPF says it agrees with the OFT market study that issues such as high charges in legacy schemes and the lack of scale and resource in small schemes urgently need to be resolved. It welcomes the long-term principles outlined in the OFT’s report, such as those for ensuring greater flexibility, increased economies of scale, independent governance and alignment of incentives between all parties.

 However, the NAPF is disappointed that the OFT did not go further in its short- and medium-term recommendations and is concerned that those on governance and charges may fail to deliver the right outcomes for savers. In particular, the NAPF warns that placing governance committees at provider level could lead to conflicts of interest and that a ban on Active Member Discounts could penalise consumers where employers have chosen to pay part of the charges for their existing employees.

 Joanne Segars, NAPF Chief Executive, said:

 “We are pleased that the OFT study reflects some of our major long-standing concerns. But the success of its short- and medium-term recommendations will depend on how they are implemented by the Government and the industry. There are several barriers that need to be overcome before we can achieve the right outcomes – especially around governance.

 “It is essential that the Government and regulators bring in policies that ensure sustainable and good DC pension provision in the long term. Acting quickly will ensure that pension savers, especially those who will be saving into a pension for the first time through automatic enrolment, benefit from these improvements from the outset.

 “The NAPF believes that governance, transparency of charges, value for money and economies of scale are critical to delivering good workplace DC pensions, so we urge the OFT to continue to monitor progress in the DC landscape.”

Back to Index


Similar News to this Story

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.