The Department for Work and Pensions (DWP) has published a Post Implementation Review of the Occupational Pension Schemes (Scheme Administration) Regulations 1996.
These Regulations, as amended, are those which introduced the statutory requirement for trustees of schemes which provide money purchase benefits to prepare a Chair’s Statement.
The amending Regulations made in 2016 require the Secretary of State to publish a first review of the provision ahead of the legal deadline of 6 April 2021, hence this latest publication.
To inform the review, a short list of questions was drawn up and sent by letter to pension providers, industry representative bodies and scheme member representative groups. This was then followed up with targeted discussions with those who responded and discussions were also conducted with the Pensions Regulator.
The questions focused on whether the policy objectives had been delivered, remained appropriate and could be achieved in an alternative manner outside of regulations. Although all relevant governance provisions were in the scope of the review, “the strong feeling around the purpose and effect of the Chair’s statement was a very important issue”.
Conclusions
The conclusions of the review are:
Capita comment
The views expressed by the industry in the report are largely shared by Capita. The Chair’s Statement has a role in promoting good governance in DC schemes and ensuring that matters are regularly reviewed but requiring part of the content to be disclosed to members does not fit well with the Government’s intention to improve member engagement. This is because the required disclosures are overly complex and long and not easy for members to understand. In our view, there needs to be a full review of annual member disclosures in a bid to drive up member engagement.