Master trusts being used for automatic enrolment and large DC schemes are the most aware of The Pensions Regulator’s DC quality features and are most likely to have taken action to ensure that they are present in their schemes, research shows.
The 31 DC quality features are designed to help schemes deliver good outcomes for retirement savers. Twenty two relate directly to legislation, while the remaining nine either have a partial basis in legislation or are based on current industry good practice.
You can view the DC features research data and summary reports in DC features.
Research into the presence of the regulator’s DC quality features was conducted among single employer DC trust-based schemes and master trusts earlier this year. The survey assessed the presence of 30 of the 31 features for DC and hybrid schemes, and 29 features for master trusts (see editor’s notes for more detail).
Key findings of the survey include:
Master trusts
- All master trusts surveyed (17) were aware of the DC quality features. Eight master trusts had reviewed their scheme against them, six had plans to review in the next year and three were unsure of what their plans were.
- Eleven master trusts stated they were being used for automatic enrolment – of these, all had either reviewed their feature presence or planned to in the next six months.
- On average all master trust schemes had 22 of the 29 features measured present. The figure was higher for master trusts being used for automatic enrolment, with 25 present on average.
DC and hybrid schemes
- Awareness of the features is highest among large DC and large hybrid schemes (98% and 100%) and lowest among small DC schemes (68%).
- There was variation in presence of the DC quality features by scheme size. Among the 30 features measured, large hybrid schemes had 25 on average, DC large schemes had 24, medium schemes had 21, and small schemes had 15 features present on average. Only 7% of small DC schemes had 24 or more of the features present.
The regulator’s executive director for DC, governance and administration Andrew Warwick-Thompson said:
“DC pensions are now a substantial market with rapidly increasing membership and asset values. It’s crucial that schemes are managed in a professional way by trustees who have the appropriate levels of knowledge and skill to ensure both legal compliance and industry best practice.
“It is positive that master trusts and other schemes being used for automatic enrolment demonstrate more of the quality features that we believe are necessary to deliver good outcomes for retirement savers.
“However, we will work hard with the industry this year to drive up standards across all schemes. We have provided a template that trustees can use to assess the presence of the quality features in their scheme, and a draft governance statement they can use to report to their members and employers. In addition, we have also launched master trust assurance with the ICAEW to enable trustees to obtain an independent audit of those governance and administration controls, which we believe best support good member outcomes.”
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