The Treasury is to give more powers to regulators to improve value for money and performance accountability.
Defined contribution schemes that are deemed to be poorly performing could find themselves banned from accepting new clients under proposals unveiled this weekend by the Treasury.
Chancellor Jeremy Hunt, ahead of his Budget announcement on Wednesday, also set out plans to force schemes to report on how much they allocate to UK assets in an effort to boost investment in the country’s economy.
The proposals also include new cost disclosure requirements to improve schemes’ value for money.
On the performance plans, the Treasury stated: “Pension funds will be required to publicly compare their performance data against competitor schemes, including at least two schemes managing at least £10bn in assets.
“Schemes performing poorly for savers won’t be allowed to take on new business from employers, with The Pensions Regulator [TPR] and Financial Conduct Authority having a full range of intervention powers.”
Value for money
The measure is linked to proposed enhanced value for money measures.
The Treasury said its reforms in this area would “improve outcomes for savers and consolidate the DC pensions market”, as well as ensuring that “pension managers are focused on securing good returns for savers”.
TPR chief executive Nausicaa Delfas said in a statement: “Millions of people rely on a pension to support them in later life. That’s why it’s so important that we make sure all pension savers receive value for money.
“With more disclosure helping to spark competition between schemes, and enhanced powers to crack down on poor performers, we can really deliver for savers, now and in the future.”
All aspects of the proposals are subject to industry consultations.
