New applicants will need contribution rates of 12% or more to meet the new PLSA Pension Quality Mark (PQM) standards. Previously, contribution rates were set at a 10% minimum. This change reflects research from our Hitting the Target report last year – and by the Pension Policy Institute – that a 12% contribution is necessary to reach a good standard of living in retirement.
The new standards currently apply only for those schemes that have previously not been awarded the PQM. Renewing applicants will be able to transition, over time, to the new standards.
As before, PLSA PQM applicants will have the option to apply for the PQM Plus standard. The PQM Plus contribution rate will still be 15%.
The launch of our new standards is accompanied by the announcement of the members of our new PQM Standards Committee, which will have oversight of the Standards.
The new PQM Standards Committee members are:
• Andy Cheseldine
• Ian McKinlay
• Rachel Neill
• Mike Nixon
• Nigel Stanley
• Will Sutton
• Lesley Williams (Chair)
Lesley Williams, Chair of the PQM Standards Committee, said: “We are bringing these new standards to the industry to highlight those schemes that are really pushing to help savers achieve a good level of income in their retirements and to encourage others to join them.
“As we said in our Hitting the Target report, we believe that a 12% contribution rate is key to that goal, as well as high standards of governance.
“We’re also delighted to welcome the new members of the PQM Standards Committee. Each has a firm interest in encouraging high standards in pension provision and together will bring diverse expertise to ensure the continued success of PQM.”
PQM was developed in 2009 and is an accreditation scheme designed to increase confidence in workplace pensions by helping employers demonstrate the quality of their scheme. It is available to single-employer DC pension schemes offered by an employer to their employees. Currently there are around 180 schemes accredited with PQM, covering over 650,000 active savers.
The new PLSA PQM Standards are available here
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