The Pensions Regulator has published a new guide to help pension trustees of defined contribution schemes meet quality standards
In November, the TPR launched its DC code of practise and regulatory guidance, which sets out requirements for schemes to meet pension legislation. The regulator was concerned that opaque costs and charges deducted from a member's fund could have a significant impact upon the value of their pension and wanted to help trustees capture the total cost and benefits of scheme membership in a way that could demonstrate value for money.
The TPR said it now expects trustees to publish a governance statement every year to make sure schemes meet quality features. This must be made easily available to members and employers, and trustees must also set out an improvement plan if necessary.
Andrew Warwick-Thompson, TPR's executive director for DC, governance and administration, said: 'We're providing DC trustees with the tools they need to demonstrate to employers and retirement savers that they are running a quality scheme, capable of delivering good outcomes for members.
'We expect trustees to be able to show that their scheme meets the standards set out in our code and guidance - most trustees want to do right by their scheme members, and this tool will enable them to demonstrate that they are doing their job properly.'
The regulator has also published a template to help trustee's assess their scheme against the regulators standards. The template, which is available online, can also be used to monitor plans to implement best practice.
Responding to the launch of the new governance tools, pensions consultants Muse Advisory said the update was as 'a good step forward'. However, they raised concerns about the way quality assessments may be performed.
DC lead Ian McQuade added: 'The challenge for trustees is that they can only make that assessment based on their own experiences of what is good and bad. Obtaining an independent assessment is the best way for trustees to capture the position, and ensure their governance is fit for purpose.'