MPs have launched a new inquiry into governance and best practice in workplace pension schemes in a bid to address low levels of confidence and participation in pension saving.
The House of Commons' work and pensions committee launched a call for evidence yesterday for the inquiry, which will build on its recent work on pensions auto-enrolment. The results of that inquiry are due to be published 'shortly', the committee said.
Announcing the new inquiry, the committee said: 'It is widely acknowledged that people in the UK are not saving enough for their retirement. It is also clear that confidence in pension saving is at a low level.
are needed to build confidence in pension investment, to make retirement saving
easier and to bring about the behavioural change which will be required if
retirement income is to increase.
While planned reforms of state pensions and the imminent introduction of auto-enrolment for workplace pensions are 'significant steps' towards addressing the shortfall in retirement income, the committee said it was clear more needed to be done.
Among the issues the inquiry will explore are how to ensure defined contribution schemes deliver good outcomes for their members. This includes looking at transparency of charges and costs, clarity of communication to pension scheme members, the government's proposals for managing small pension pots and managing investment risk and security of returns.
It will also consider how DC scheme members can be supported to make investment decisions and assess risks - including when converting to annuities - and if and how greater economies of scale in the sector could produce better value for money for members.
Striking an 'appropriate balance' between regulation, self-regulation and good governance to restore confidence and raise standards is also in the inquiry's remit.
And it will examine the implications of the changing balance between defined benefit schemes and DC schemes. This covers the scope for collective DC schemes and other risk-sharing schemes, and the outlook for remaining DB schemes, and in particular whether red-tape for them could be reduced and more measures taken to tackle their decline.
The deadline for written evidence for the inquiry is April 13 2012, and submissions can be made to [email protected].