This week has seen The Pensions Regulator (TPR) launch a review into whether trustees of pension schemes are carrying out assessments of the costs and charges paid by members adequately. The review has commenced as The Pensions Regulator believes that many trustees of smaller pension schemes may not be assessing value for their members correctly.
It is crucial that all members of a pension scheme get the benefits that they deserve, and trustees are required to carry out what is known as an annual value for member assessment. This is designed to help trustees to identify poor performing areas which they can address. This, in turn, results in an ever-improving scheme and one that is likely to provide its members with good outcomes.
The findings of the review will not just see whether the assessments are being carried out correctly, but it will also find what issues trustees face when conducting an assessment as well as highlighting good practice. These findings may then be turned into guidance to help trustees in the future.
Anthony Raymond, Acting Executive Director of Regulatory Policy at TPR, said: "Poor value for members is one of the key risks that trustee boards need to manage."
"From our research and experience, we believe that many small and micro schemes are failing to meet our expectations by providing a quality assessment of how their charges represent value for members. We are conducting this thematic review to better understand this position."
"We are concerned about a tail of sub-scale pension schemes and strongly believe that it is unacceptable to have two classes of DC pension saver – those that benefit from the premium of scale and good governance and administration, and those that do not."
The review will look at 100 small and micro pension schemes and a report on the findings will be published by summer 2018.