A new guide that sets out how The Pensions Regulator and the Financial Conduct Authority regulate defined contribution (DC) workplace pensions has been launched today.
Aimed at trustees, advisers and pension providers, the new guide outlines each regulator’s approach, and how they work together to ensure consistency.
The guide details areas of common ground, and explains how both regulators seek to ensure that member outcomes are not adversely affected by the differences in regulatory regime.
Andrew Warwick-Thompson, executive director for DC, governance and administration at The Pensions Regulator, said:
“Retirement savers have a right to expect that their workplace pension scheme, whether it is trust- or contract-based, is well-run and will deliver a good outcome. I can see no reason in principle why trust- or contract-based schemes should deliver different outcomes. However, joined-up regulation is essential to build equal confidence in both types of scheme, and this guide clarifies the various ways in which we and the FCA work together to improve the quality of all DC schemes.”
Christopher Woolard, director of policy, risk and research at the FCA said:
“The introduction of automatic enrolment has meant that more people than ever are being enrolled into DC schemes and many employers will not have had to consider these issues before. While both organisations already work together closely, as the new landscape takes shape it is more important than ever that there is a consistent approach between the two regulators. The guide sets out how each of us will work to achieve that.”
A series of quality standards for DC schemes, due to be launched by the Department for Work and Pensions, will set minimum requirements for governance, investment fund design and administration and offer a good level of protection for members regardless of the type of scheme selected by the employer.
Notes for editors
- The joint guide sets out the focus and approach of each regulator, demonstrating how they work together to ensure consistency and avoid duplication. It also includes detailed definitions of trust and contract-based arrangements and summarises each regulator’s objectives.
- The Pensions Regulator is the regulator of work-based pension schemes in the UK. It has objectives to: protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; and to maximise employer compliance with automatic enrolment duties.
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.