A number of DC pension schemes have been wound-up after failing to satisfy the regulators new ‘value for member’ assessments.
The Pensions Regulator has already fined one corporate trustee for failing to comply with these new rules and has confirmed that further fines are in the pipeline.
This information emerged after TPR conducted an exercise to evaluate compliance with regulations that came into force in October 2021 — requiring trustees of DC schemes under £100m to compare ‘value’ with larger pension schemes.
It found that 16 per cent of schemes in this pilot has closed and transferred members to a larger schemes as a result of this assessment.
TPR has already issued a fine of £12,500 against a corporate trustee for failing to comply with this latest regulation.
Further details about this penalty will be included in TPR’s next compliance and enforcement bulletin, which will be published later this spring.
TPR’s interim director for frontline regulation Mel Charles says: “Where trustees are found to be in breach of their duties on value, we’ll want to understand how they’ll improve. But, if they can’t or won’t, we expect them to transfer members to a better-value scheme and consider winding up their scheme.
“It is encouraging that our initiative has shown schemes are now actively choosing to wind up in the face of the new regulations.”