TPR probes ‘sub-scale’ DC schemes over member costs

The Pensions Regulator (TPR) has launched a probe into whether trustees of small and micro schemes are paying enough attention to the costs and charges paid by members.

TPR has launched the thematic review because it believes many trustees of small and micro schemes may not be properly assessing value for members.

The thematic review will analyse explanation of the value for member assessments made by 100 small and micro schemes in their chair statements. A report on the findings is expected to be published by summer 2018.

Trustees are required to carry out an annual value for member assessment, which can help trustees to identify and address poor performing areas, in turn making a scheme more likely to provide good outcomes for members.

TPR says the findings of its review will enable it to understand the challenges trustees face when conducting the assessment. Any examples of good practice highlighted by the review may be used to help develop targeted guidance for this sector, supporting trustees of small and micro schemes to achieve value for members.

TPR acting executive director of regulatory policy Anthony Raymond says: “Poor value for members is one of the key risks that trustee boards need to manage.

“From our research and experience we believe that many small and micro schemes are failing to meet our expectations by providing a quality assessment of how their charges represent value for members. We are conducting this thematic review to better understand this position.

“We are concerned about a tail of sub-scale pension schemes and strongly believe that it is unacceptable to have two classes of DC pension saver – those that benefit from the premium of scale and good governance and administration, and those that do not.”