The Pensions Regulator (TPR) has published a new draft defined contribution (DC) code of practice for consultation.
The new code aims to raise standards of governance and administration in defined contribution (DC) pension schemes.
It sets out the standards of conduct and practice the regulator expects trustee boards to meet in complying with their legal duties, and to deliver better long-term outcomes for retirement savers.
The revised code will overhaul the existing DC code, first published in 2013, in order to better support trustee boards and workplace pension scheme managers in light of changes to pensions legislation.
The consultation into the code launched on 24 November and will run until the end of January.
The new DC code will be laid in Parliament in May 2016 and will come into effect in July. Until then, the 2013 code will remain in force.
TPR will run a separate consultation on a series of ‘how to’ guides that it intends to produce to support the revised DC code next spring.
Andrew Warwick-Thompson, executive director at The Pensions Regulator, said: “The reforms introduced this year have led to unprecedented change in pensions and we know that trustees of DC schemes and any scheme offering money purchase benefits need to adapt to ensure member outcomes remain strong.
“In this context, the draft revised DC code seeks to make the standards we expect from trustees as clear as possible. The guides that will support the new DC code will provide practical guidance to help trustees understand the different measures they can put in place to meet the standards in the code.”
Hugh Nolan, chief actuary at JLT Employee Benefits, added: “We welcome the Pension Regulator’s consultation on the new DC code. The intention to simplify, clarify and consolidate the Regulator’s expectations can only be applauded and we have been particularly pleased by the excellent engagement with key stakeholders before reaching the current stage.”
Sophia Singleton, partner and head of DC Consulting at Aon Hewitt, said: “What trustees are looking for right now is practical support with how to complete their chairman’s statement, and in particular, how to assess value for members. This draft code does not achieve that. The draft code itself has taken a step back to cover the issues at a higher level, so I am looking for significantly more detail from the Pensions Regulator in the guidance in the spring.”
“The other area that isn’t covered is how members access the new flexibilities. Making the right decisions and choosing the right product can potentially have a significant impact on a member’s outcome. This is a crucial area where trustees need guidance”.