News for trust-based schemes
In June 2022, TPR published its latest annual survey of DC trust-based pension schemes.
The survey focuses on a range of important and relevant topics such as value for members, pensions dashboards and climate change. TPR has used the results of the survey to emphasise a few key findings and expectations for the future, including:
Value for members
With the new legislation (effective from the first scheme year end falling after 31 December 2021) which requires schemes with assets under management of less than £100 million to carry out a more detailed value for members assessment, TPR noted that:
Climate change
TPR expects pension schemes to be dedicating time to assessing the risks and opportunities presented by climate change. However, it found that all but the largest schemes are not dedicating enough time to this. Whilst every master trust and nine in ten large schemes had allocated time or resources here, this fell to just over half of medium schemes (55%), fewer than one in 10 small schemes (9%) and just 5% of micro schemes.
TPR suggests schemes should not wait for legislation to force them to consider this, but should start taking action now.
Pensions dashboards
The survey suggested DC trustees were at risk of not being sufficiently prepared for their pensions dashboard deadline. Overall, 94% of schemes with 100+ members had heard of pensions dashboards and 83% were aware of the legal requirement for schemes to provide data to savers through a dashboard. However, at the time of the survey, most schemes had yet to take action to prepare for the dashboards, but many were planning to do so within the next six months.
Small and micro scheme trends
TPR noted that small schemes (under £100m assets under management) and micro schemes (less than 12 members) often were unaware of the requirements on the trustees and the codes of practice TPR has in place to support them.
The outcome of the survey underlines that TPR’s goal to improve value for members through consolidation into larger, well-run schemes would be beneficial to members. However there are, of course, some well-run small and micro schemes that are providing value for members. What is key is for trustees to ensure this is the case and, importantly, document it to be able to demonstrate it to TPR.
Whether employers provide employees with a contract-based, trust-based or master trust pension scheme, it is important to ensure they are providing staff with the best value for members and meeting their regulatory requirements.
Contact your PS Aspire consultant if you’d like to ensure your pension scheme is meeting your own and your employees’ needs.