Pension schemes that do not deliver good outcomes for savers will be expected to consolidate under regulation being designed for later this year by The Pension Regulator.
Outgoing TPR chief executive, Charles Counsell said a new value for members regulatory initiative, that is expected to be launched later this year, will challenge schemes that are not “completing, or acting on, their value for members assessments”.
“Ultimately, those running schemes who cannot deliver good outcomes for savers will be expected to consolidate,” Counsell said.
The value for money framework is to be based on three key pillars: investment performance, costs and charges and quality of services.
Under the current proposals for the framework, pension schemes will need to disclose investment returns over three, five, 10 and 15 years, if available.
Commenting on the framework previously, pensions minister Laura Trott said: “Ensuring that pension schemes deliver value for money doesn’t just mean low costs and charges.
“It also means that savers get good value from their investments and receive a quality level of service.”
In a blog post published on the TPR website yesterday (March 21), Counsell, who is to step down at the end of March said he is confident he leaves the organisation in “great shape” to meet the challenges ahead under its new leadership.
From next month, Nausicaa Delfas, who is currently executive director, governance, at the Financial Conduct Authority will take over the reigns as chief executive of TPR.
“There is now a unanimity across the industry that pensions must offer value for money, and that low charges are just one part of the equation,” Counsell wrote in the post.
“This will be crucial for the many millions of people now saving into a defined contribution scheme, thanks to the ongoing success of automatic enrolment.
“We are working hard to engage with the industry, via round-table events and through communications, to ensure that the purpose and details of the proposed new value for money framework are well understood and of course to listen to the views of stakeholders.”
The consultation period for the framework is set to close next week on March 27, 2023.
jane.matthews@ft.com
