A joint guide on how defined contribution pension schemes should be regulated has been launched today by The Pensions Regulator and the Financial Conduct Authority.
It sets out the focus and approach of each watchdog, demonstrating how they should work together to ensure consistency and avoid duplication. It also contains detailed definitions of trust and contract-based arrangements and summarises each regulator's objectives.
TPR said the guide covered areas of common ground explaining how both regulators seek to ensure that member outcomes are not adversely affected by the differences in regulatory schemes. The guide is aimed at trustees, advisers and pension providers.
Andrew Warwick-Thompson, TPR's executive director for DC, governance and administration, said retirement savers had a right to expect that their workplace pension scheme, whether it is trust- or contract-based, was well run and would deliver a good outcome.
'I can see no reason in principle why trust- or contract-based schemes should deliver different outcomes,' he said.
'However, joined-up regulation is essential to build equal confidence in both types of scheme, and this guide clarifies the various ways in which we and the FCA work together to improve the quality of all DC schemes.'
At the FCA, director of policy, risk and research Christopher Woolard added: 'While both organisations already work together closely, as the new [auto-enrolment] landscape takes shape it is more important than ever that there is a consistent approach between the two regulators.
'The guide sets out how each of us will work to achieve that.'
Actuaries Barnett Waddingham welcomed the guide, saying that good governance was key for any successful DC arrangement and would lead to the 'best outcomes for members.'
Partner Mark Futcher said: 'Underlying all DC schemes are the same fundamental issues and sponsoring employers should ensure that they are getting their employees the best outcome for their spend. Whether there is a legal duty or not, this is good business practice.
'We have seen pressure on contract-based pension providers to increase the governance and oversight surrounding their platforms and I think we will soon see a formal duty placed on the employer to ensure that their automatic enrolment scheme complies with a minimum standard.'
