The Pensions Regulator has published guidance for trustees of defined contribution (DC) schemes (including master trusts) on Supporting Defined Contributions Savers in the Current Economic Climate. It follows on from the Regulator’s previous statement issued in the light of the bond market crisis in September / October 2022. Although DC schemes are not directly impacted by the issues affecting LDI, DC savers are not immune to market events. Significant market volatility from both equities and falling bond values, along with increases in inflation and interest rates, has affected those accessing their pension savings.

The guidance is timely, coming on the same day that the Pensions and Lifetime Savings Association updated its Retirement Living Standards and warned that retirees seeking to achieve a basic standard of living will need to save significantly more to cover an anticipated increase in their expenditure of over 20%, due to high inflation.

Diverse impact

Trustees are reminded that the impact of the fall in bond prices will be diverse – depending upon individual DC savers allocation to bonds, where they are in their retirement journey and how they plan to access their savings. The impact could be more significant for those closer to retirement, depending on the investment strategy. For some members the fall in bond prices may be partly compensated by the consequential improved annuity rates – but not all DC savers will be looking at taking out an annuity at retirement. Trustees are encouraged to support savers closer to retirement, so they understand the implications of their decisions and are cautioned against hasty decisions which could crystallise losses, leading to poorer outcomes. Inadequate support may also leave some savers open to scammers.

Action plan

The statement freely admits that many of the key messages are taken from the existing Code of Practice and guidance on investment governance and communicating and reporting. In line with this, trustees are urged to develop their own action plan which addresses the following:

Review governance and investment arrangements

  • Ensure their scheme has sufficient scale to support savers.
  • Dedicate enough time to govern the DC arrangements effectively.
  • Review investment advisers against agreed objectives and consider the proactivity of their advice.
  • Use member data and trends in behaviour to inform decisions and input into investment strategy.
  • Ensure investment options remain suitable and consider how market conditions might present new risks and opportunities.
  • Monitor performance against objectives and industry benchmarks and consider how different groups of members have been impacted.
  • Assess how investments protect against high inflation and review the use of cash funds.

Supporting savers

  • Strengthen their scheme’s member support capability and target efforts towards those most affected and in need of help.
  • Use insights to inform their guidance and saver engagement plans.
  • Review communications to ensure savers can make informed decisions about their investments.
  • Review and inform savers about the support, guidance and modelling tools which may help them navigate current market conditions.
  • Help savers understand what recent performance means for their individual circumstances.
  • Encourage savers to inform the scheme if their retirement plans change.
  • Highlight the importance of seeking advice and taking a long-term perspective on pension saving.
  • Highlight the risk of potential scams.
  • Consider their savers’ communication journey, including additional information to supplement annual benefit statements.
  • Be specific in their guidance, to the circumstances faced by savers at different points in their retirement plans.
  • Tell them how certain actions can protect or boost their savings.
  • Guide them through the trade-offs that they will need to make and the risks involved.
  • Monitor member action / inaction and adjust and evolve their engagement plans accordingly.


There is little in the statement which is really new – and much of what it contains is relevant to trustees of DC schemes at any time – not just during a period of economic uncertainty. But the Regulator’s latest statement serves as a reminder that DC schemes require a lot of management, if they are to be run effectively, and it continues the calls for trustees of smaller DC schemes to consider whether consolidation into a master trust would be a better option for their members.