The Pensions Regulator’s (TPR) proposed Code of Practice for defined contribution (DC) pensions risks being "counterproductive" according to the National Association of Pension Funds (NAPF) policy director Darren Philp , with concerns being raised over lack of clarity and the fact that half of the DC market will not be affected by the code's remit.

The code tackles issues related to trust-based pensions only and it has been criticised by industry figures for not dealing with contract-based issues. The NAPF has argued that the overly prescriptive nature of the code may push employers offering trust-based pension schemes into contract-based pension schemes therefore which may not be in the member’s best interests.

In addition it argued that there needs to be a slimmer, clearer and objective-based code on offer to ensure that all workplace schemes are targeted.

In January the regulator published for consultation a set of 31 DC quality features covering areas such as contributions, investments, governance standards, administration, converting a pension pot into a retirement income and member communications. DC trust-based schemes will be expected to adopt a disclosure framework to demonstrate how they are to comply with DC quality features.

Philp commented: “We support the regulator’s overall aim of improving defined contribution pensions. With millions of workers now being auto-enrolled into these pensions, it is essential that the regulator focuses on getting them right.

“All pensions should meet high standards, so we are disappointed that the proposed code does not cover contract-based schemes. This raises important questions about how workplace pensions are regulated. We strongly believe that any effort to improve the quality of pensions should target all types of pensions.”

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