The Pensions Board has published a synopsis of the main points made in submissions it received in response to its consultation paper on the future structure and regulation of defined contribution (DC) pensions. The Board received 44 written submissions in total of which 6 were from individuals and 38 were from organisations/schemes.
Whilst the Board welcomed all comments during the consultation phase, specific questions were posed in relation to trusteeship, regulation, investment, disclosure and value for money. Some interesting points included in the synopsis are set out below:
- Trusteeship: There was broad agreement from respondents that standards of trustee performance should be raised but mixed views as to whether self-certification would actually achieve higher competence levels and could prove to be a ‘box –ticking’ exercise which still misses key issues.
- Regulation: In relation to the Board’s proposal to introduce legislation requiring new schemes to satisfy the Board that scheme design is fit for purpose before being granted approval, questions were raised by respondents regarding how it could be determined that a scheme design was in fact appropriate and it was commented that it was hard to envisage a ‘one size fits all’ design.
- Investment: There were a number of suggestions offered on how to create appropriate default investment strategies. It was generally agreed that default strategies need to be carefully designed and suitably structured to assist members in making the best decisions. It was also generally considered that practical guidance on the design, governance, review, monitoring and communication of default strategies would be helpful.
- Disclosure: There was universal agreement that the quality of member information needs to be improved, made more user-friendly and that current regulatory requisites are inadequate.
- Value for money: Many commented that value for money cannot only be about costs but must take account of services provided and overall benefits for members.
No definitive conclusions have yet to be made by the Board. Next steps include further analysis of the submissions and the preparation of a report for the Minister for Social Protection with the Boards’ recommendations on what the future structure and regulation of defined contribution (DC) pensions should be.