The Office of Fair Trading (OFT) has launched a market study of defined contribution (DC) workplace pension schemes.
The study aims to examine whether schemes are set up to provide the best value for money for employees.
It will look at:
- How pension providers compete and how the market develops.
- Whether there is enough pressure on providers to keep pension charges low and whether savers are given enough information on charges.
- Whether smaller firms face difficulties in making pension decisions and if they receive appropriate help when setting up a workplace pension scheme.
- The barriers to switching between schemes.
The OFT is working with the Department for Work and Pensions, The Pensions Regulator and the Financial Services Authority. It will also consult with providers, employers and employees. It plans to complete the study by August 2013.
Mary Starks, senior director in the OFT’s services, infrastructure and public markets group, said: “The UK workplace pensions market is set for rapid growth and change over the next six years, in particular with the introduction of automatic enrolment. It is important that these savers get a good deal.
“We want to take a look at the market now to ensure that providers are competing to offer the best possible deals, and that the choices made by employers mean that employees are saving into good pension schemes for their retirement.”