Enabling good member outcomes in work-based pension provision
The world of defined contribution (DC) pensions is changing. The introduction of auto -enrolment will result in the number of people saving in DC schemes rising dramatically. As a result of the Government’s workplace pension reforms it is expected that 5 to 8 million people will be newly saving or saving more in all forms of workplace pension scheme. DC provision will be at the forefront of efforts to give people the dignity and security in retirement they expect. To maximise the benefits of auto- enrolment, it is important that members have confidence that they are saving into durable products that can deliver good outcomes.
The Pensions Regulator has 5 statutory objectives on workplace pensions. These include protecting the pension benefits of people in DC pension schemes. The overriding strategic aim of our approach to DC regulation is to support the market in delivering good outcomes for members of DC pension schemes, intervening only as necessary where the market appears unlikely to do so unaided. We are committed to following best practice in risk-based regulation with a proportionate approach that is mindful of burdens on business.
Given the growth in DC provision and the Government’s workplace pension reforms, it is important that we review our DC regulatory strategy to ensure it is fit to tackle both current and future challenges in the DC landscape. 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 them.
Our discussions with stakeholders suggest that a review of how to ensure good member outcomes will be welcomed. The Better Regulation Executive (BRE) and National Audit Office (NAO) have also highlighted the importance of the regulator increasing its focus on DC regulation. The European Union (EU) is also looking at the regulation of DC schemes.