What are the differences between the old and the new standards?
The new standards have a stronger focus on outcomes, rather than prescriptive rules
- The headline charge is an increase from 10-12% in contributions (with at least 6% from the employer)
- We expect employers to enrol all employees at this rate
- There are also stronger monitoring requirements for the numbers of members meeting minimum contributions
- The new rules have a greater emphasis on board or committee responsibilities, rather than prescriptive roles for trustees, with a focus on: having the right mix of people; tools for planning and review; and interaction with members
- There is a new focus on identifying and reacting to 'trigger events' (such as changes to scheme membership, or to the wider policy, investment or economic environment)
- There is a greater emphasis placed on matching the right default strategy for the membership (and understanding members)
- There is greater recognition of 'value for money' (VfM) principles, not just focused on charges (which are now addressed by regulations) but on value in the round, including an obligation to carry out due diligence on the manager
- Focused more on the member experience, rather than the details of how communications should be drafted etc.
- Need to have greater understanding of the range of members, in particular vulnerable members
- Requirement for a board or committee to have an engagement strategy and a member journey, including a greater focus on proactive support at retirement
24/01/2019 - PQM Standards 2019 read more
18/10/2018 - PQM Distinction award 2018 read more
T: 020 7601 1736
The IoD welcomes the PQM initiative. Employers and employees need to work together on tackling the retirement income challenges we all face, and on improving communication of scheme benefits. The focus of PQM in both these areas marks an important step forward in preserving and enhancing good quality workplace pension provision.
Malcolm Small - Senior Adviser, Pensions Policy, Institute of Directors