Pension schemes are behind with their work on defined contribution (DC) governance requirements, according to research by pensions law firm Sackers.
Its survey, which was conducted among trustees and pension professionals, found that more than two-thirds (69%) of pension schemes have not carried out a value-for-money assessment, a new standard set by The Pension Regulator’s (TPR) DC Code of Practice.
The research also found that fewer schemes (31%) have assessed value for money than have completed their governance assessment against the TPR’s code of practice, with 41% doing so.
A third of schemes have also not yet reviewed their default fund to assess whether it will comply with the forthcoming charges cap.
From April 2015, the Department for Work and Pensions (DWP) is introducing new statutory governance requirements, which will require trustees of occupational DC pension schemes to produce an annual statement detailing how minimum legal standards have been met.
Helen Ball, partner and head of DC at Sackers, said: “Many pension schemes are preoccupied with adopting the changes announced in this year’s Budget, but forget that those are largely optional.
“In their rush to change their benefit options and default arrangements, they should not overlook the DWP’s minimum governance standards, which will be mandatory and legally binding.
“Our findings highlight the difficulty schemes face in assessing value for money for scheme members, and emphasise the confusion that persists regarding the exact requirements of governance assessments.
“Though the new regulations proposed by the DWP are still to be finalised, it is important that trustees start to plan how their schemes will meet the minimum legal requirements as soon as possible.”