The Pensions Regulator (TPR) has today published a range of new and updated standards that defined contribution (DC) pension schemes should meet in order for individuals to receive the best retirement saving outcomes.

The standards which are being issued for consultation have added importance as a result of auto-enrolment and employers having to meet improved governance and administration standards outlined by the regulator.

Areas published for consultation include a set of 31 DC quality features covering key areas such as contributions, investments, governance standards, administration, converting a pension pot into a retirement income and member communications. In addition the regulator has outlined a ‘comply or explain’ regime where occupational DC trust-based pension schemes will be expected to adopt a disclosure framework to demonstrate how they comply with the DC quality features or to explain any inconsistencies.

Furthermore, the regulator outlined that where trustees fall short of the standards expected, it will use enforcement powers to put things right. Such powers include issuing notices directing compliance with the law, fines and removing trustees and replacing them with new ones. In order to ensure that similar levels of protection are maintained in both occupational DC trust-based schemes and work-based personal pensions or contract-based schemes, the regulator has announced that it will work closely with the FSA and ensure that regulatory responsibility is shared. In a statement the regulator said that the “FSA’s regulatory regime is in many ways parallel” to the framework for occupational DC trust-based schemes.

TPR chief executive Bill Galvin said: “Members bear risks where DC schemes perform poorly. Many members will not have any experience of DC pension saving, so it’s vital that schemes are run by capable people who act in members’ interests – from enrolment to retirement.

“Where we find schemes fall short of the standards we have set out, we will expect them to improve. Some smaller schemes may find this challenging and decide that the interests of their members would be better served in another type of arrangement.”

The deadline for consultation responses is 28 March.

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