The Pensions and Lifetime Savings Association (PLSA) has published its response to the ‘Future of the Defined Contribution Pension Market: The Case for Greater Consolidation’ consultation.
Download the full submission from the PLSA website.
Nigel Peaple, Director of Policy and Advocacy, PLSA, said: “It is right to expect schemes to consider consolidation if they are not providing value for money, however, it is essential that this only takes place where there is clear evidence that doing so improves member outcomes. Schemes of all sizes can deliver excellent outcomes for members so consolidation should not be an end in itself.
“The average scale of DC schemes is already increasing as the market matures, due to both automatic enrolment and employers choosing to consolidate their schemes in the best interest of members. Indeed, over the last decade, the number of DC and hybrid non-micro schemes have reduced by two thirds. These consolidations are based on a careful and rounded assessment of the benefits to members of consolidation, rather than one triggered by a question of scale.
“Importantly, given the very high asset thresholds proposed by the Government, there is a danger that forcing consolidation will undermine the employer link to pensions which, until now, has gone hand in hand with higher pension contributions and greater support through the decision-making journey. So far, we have also seen little evidence to support the suggestion that the benefits to members of extensive consolidation would outweigh the costs involved.”
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]
Steven Kennedy, Senior PR Manager
020 7601 1737 | 07713 073024 | [email protected]