The Pensions Regulator (TPR) has published a discussion paper, Enabling good member outcomes in work-based pension provision, inviting views on how it may be possible to raise standards in defined contribution (DC) pension provision, and in turn, trigger greater confidence in pension saving.

The introduction of auto-enrolment in 2012 means that the number of people saving into DC schemes is likely to rise dramatically. Therefore, TPR is increasingly concerned with the regulation of DC schemes and how it can reach its statutory objective.

The discussion paper identifies six elements which TPR believes are important for achieving good outcomes for savers, and explores the ability of the different segments of the DC market to provide these elements in the pension products they offer. These elements are:

  • appropriate decisions with regards pension contributions;
  • appropriate investment decisions;
  • efficient and effective administration of DC schemes;
  • protection of scheme assets;
  • value for money; and
  • appropriate decisions on converting private pension savings into a retirement income.

Having assessed market forces, TPR highlighted in the discussion paper the areas in which it believes there are challenges to be met. These areas are:

  • effective and efficient administration;
  • raising standards in small schemes;
  • multi-employer occupational schemes with non-associated employers;
  • product characteristics;
  • costs and fair value;
  • protection of assets;
  • selection of a suitable scheme by employers;
  • appropriate decisions on converting private pension savings into a retirement income; and
  • accountability for decision-making in members’ interests.

TPR is seeking views on what steps should be taken to meet those challenges and asks for comments to be provided by 22 April 2011.