The Pensions Regulator’s new revised code of practice is flawed because it will not protect the 3m savers in contract-based schemes says the NAPF.
A new draft code for the running of occupational trust-based DC schemes has been laid before Parliament and the Northern Ireland Assembly today and is expected to come into force in November 2013.
The code provides practical guidance for trustees of occupational DC trust-based pension schemes about the requirements of pensions legislation. It sets those DC quality features underpinned by legislation in the context of their legal framework and gives practical guidance on how trustees with responsibility for discharging those requirements can demonstrate that they have achieved the relevant standards which the regulator considers likely to drive good member outcomes.
TPR executive director for DC, governance and administration Andrew Warwick-Thompson says: “Getting DC pensions right is central to making automatic enrolment a success and improving retirement incomes for millions of people.
“Although there are many excellent DC schemes governed in members’ best interests, overall standards remain mixed. The code of practice will help to meet trustee demands for practical guidance on how they can meet the legislative requirements for running a DC scheme.”
NAPF chief executive Joanne Segars says: “Auto-enrolment means millions of people will depend on DC pensions for their retirement saving, so standards need to be as high as possible. This is a good initiative that should drive pension quality upwards.
“The Regulator’s first draft of this code was too long and very confusing. They have taken large chunks of it back to the drawing board and it is now in much better shape. The code is now more user-friendly and is clearer about the difference between trustees’ legal obligations and suggestions for good practice.
“But the big weakness of this code is that it excludes contract-based pension schemes, meaning around three million savers will be overlooked by this effort. Savers need to know they are getting a good deal, whatever kind of pension they are in.
“The NAPF is leading the way in setting out what good DC pension provision should look like through its PQM and PQM Ready initiatives.”