Pasa updates DC governance guidance in light of 'everchanging' landscape

The Pensions Administration Standards Association (Pasa) has published updated guidance on defined contribution (DC) governance, amid growing complexity and an “everchanging landscape”.

The guidance builds on previous publications from Pasa's DC Working Group, in light of The Pensions Regulator's (TPR) continued focus on administration governance and the risk posed by poor DC administration to good saver outcomes.

It provides guidance for all stakeholders involved in the DC administration process, outlining the minimum standard required to make processes ‘compliant’ in six key areas, as well as further suggestions as to how to improve these processes to ‘good’.

Indeed, the working group emphasised that the fundamental benchmark for compliance isn’t limited to regulatory compliance, but rather the minimum required to protect pension savers’ interests to a level Independent Governance Committees (IGCs), trustees, employers and savers would naturally expect, arguing that whilst compliant processes are acceptable, ‘good’ is better.

Updated guidance has been included on the five key areas initially identified in previous versions of the guidance, data, decumulation, controls and processes, management information and transitions, as well as a new section on chair's statements.

Further updates are also expected, as the guidance emphasised that "nothing stands still in DC pensions", confirming that the group will be keeping an eye on TPR’s intention to consolidate its DC codes later this year.

Commenting on the updated guidance, Pasa DC Working Group chair, Lesley Carline, said: “Good DC administration isn’t the sole responsibility of the administration provider. Oversight and governance is at three levels – the administration provider, the employer and either trustees or IGCs.

“This guidance provides a useful resource on what’s expected from all parties in the administration process, specific to their pension arrangement type.

“The next 18 months will see further changes in the DC pension industry we will continue to refresh this document as details are confirmed.”

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