6th July 2017
PENSION QUALITY MARK INVITES SUBMISSIONS FOR WIDE RANGING CONSULTATION ON THE FUTURE STANDARDS FOR DC PENSION PROVISION
The Pension Quality Mark Ltd (PQM) has today announced a wide ranging consultation on the future standards for defined contribution (DC) pension provision in the U.K. This will cover the Pension Quality Mark (PQM) for individual employer schemes and the Pension Quality Mark Ready (PQM Ready) for multi-employer schemes.
Interested parties are invited to respond before the consultation closes on 4 August 2017. One key area the PQM is seeking feedback on is whether scheme excellence should be judged on the employer offering or the scheme member uptake.
Since being launched, PQM (2009) and PQM Ready (2013) have become the highest accreditation available for the provision of individual and multi-employer DC pensions in the U.K. However, since both were introduced there have been considerable developments in the DC market. As a result regulation and best practise now meet many of the PQM standards.
To continue this success the PQM board is proposing to review and enhance the standards required to achieve the PQM and PQM Ready accreditations. Areas covered by the consultation include:
• Introducing ways to encourage employees to take up higher levels of employer matching contributions
• Increasing minimum contribution levels
• Removing age bands for pension provision
• Reviewing fee cap levels
• Extending the standards to assess schemes approaches to corporate stewardship and environmental, social and governance issues
• Improving board performance through regular external assessment of trustee performance
• Extending the PQM Ready standards to cover Group Personal Pensions (GPPs)
The new standards are set to be released prior to the end of 2017.
Adrian Boulding, Chairman of PQM, said:
"Over the last eight years the PQM standards have led the way in the development of good quality DC pension provision including the introduction of fee caps, which went onto be reflected in industry regulation. This consultation provides the opportunity for everyone in the pensions industry to shape the delivery of good quality DC pensions in the future.
"We are particularly keen to see a debate over whether good quality is just about what is available or whether it's also about the extent to which employees take up the full pension their employer provides.
"I encourage anyone with an interest in the provision of good quality DC pensions to respond to the consultation by 4 August 2017."
Matthew Doyle, Managing Director of PQM, said:
"The PQM consultation provides an opportunity for the pensions industry to work together to deliver high quality DC pension provision that benefits the consumer."
"The consultation covers new topics not previously part of the standards including the duties of schemes and trustees as responsible owners, how diversity on trustee boards is measured and ensured, and external assessments of trustee board performance as seen in the corporate sector. With the capital that trustees are overseeing in the master trust and multi-employer space, these new standards will bring an appropriately higher level of governance."
"We encourage schemes and other interested parties to submit responses as this will help us to shape the future of the standards."