TPR to begin VfM crackdown as two-thirds of schemes unaware of requirements
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The Pensions Regulator is launching a new regulatory initiative to check if defined contribution trustees are assessing whether they are delivering value for their members, after a survey showed nearly two-thirds were unaware of this statutory obligation.
Under the planned regulatory initiative, TPR will be checking that trustees of DC schemes with assets under management of less than £100m are complying with new value for member regulations that came into force in October 2021.
“We will be reaching out to trustees we find in breach of their duties to understand how they will put things right, and if they can’t or won’t, we’ll expect them to wind up and put their members into a better run scheme. If necessary, we will consider using our powers to ensure savers are in schemes that are being run in their best interests,” said Nicola Parish, executive director of frontline regulation.
A TPR survey of DC schemes last year – to be published later this year – found just 17% of schemes that were required to complete the new value for members assessment had done so, and nearly two-thirds (64%) claimed they were unaware of this statutory obligation.
TPR said on Monday that it will contact selected schemes about their value for members assessment later this year using a data-led approach and checking that trustees have plans in place to improve their assessments. The initiative will include schemes that have indicated they have failed the assessment.
The regulator’s outgoing chief executive Charles Counsell noted earlier this month that TPR will challenge schemes that are not completing or acting on their value for members assessments.
"Ultimately, those running schemes who cannot deliver good outcomes for savers will be expected to consolidate," Counsell wrote in a recent blog post.
"Ultimately, those running schemes who cannot deliver good outcomes for savers will be expected to consolidate," Counsell wrote in a recent blog post.
A consultation on a new value for money framework by the government, TPR and the Financial Conduct Authority is running until 27 March, but TPR has said the planned regulatory initiative is separate from that.
Will TPR start ordering consolidation where VfM is unsatisfactory?
