Costs, Charges and Governance in DC Schemes


Thanks to automatic enrolment, an estimated 6-9 million additional people will be saving into a workplace pension over the next few years. It is crucial that these schemes are well-designed and offer real value for money for savers.

The Pensions and Lifetime Savings Association is committed to promoting good DC provision and has been at the forefront of driving up standards:

  • The Pension Quality Mark (PQM), a standard recognising high quality DC schemes, was launched in 2009. PQM READY recognises high quality master trusts with independent governance, low charges and strong communications.
  • In October 2014, we published our manifesto Pension Possibilities: Making the Right Decisions for the Long Term. This calls on the Government to drive higher standards of governance and reduce tick-box regulation.
  • In 2012 we delivered the Pension Charges Made Clear: Joint Industry Code of Conduct which sets the standard for providing clear and accurate information to employers about costs, charges and associated services when they are selecting a DC scheme.

In our responses to the Department for Work and Pension’s Better Workplace Pensions consultations we emphasised the significant role of governance and scale in ensuring good outcomes for members. We highlighted that most DC workplace pension schemes already operate charges well below the Government’s 0.75% charge cap, with the average Pensions and Lifetime Savings Association member charge falling at 0.46%.

We are pleased that  a number of the concerns we raised during the consultation were acted on, in particular the need to revise the ban on ‘Active Member Discounts’ and our recommendation that the required minimum number of trustees be reduced from seven to three.

We will continue to work with regulators and industry partners on the governance, costs and charges agenda.


The charges calculator

Find out about the Pension Quality Mark

Guidance on choosing a scheme for automatic enrolment

Advice from The Pensions Regulator