Committee launch inquiry into best practice in workplace pension provision
27 February 2012
It is widely acknowledged that people in the UK are not saving enough for their retirement. It is also clear that confidence in pension saving is at a low level.
Measures are needed to build confidence in pension investment, to make retirement saving easier and to bring about the behavioural change which will be required if retirement income is to increase.
The Government’s proposed reform of State Pensions and the introduction of automatic enrolment in workplace pensions are significant steps in addressing inadequate retirement income levels. But it is clear that further steps are needed to encourage people to increase their retirement saving and to ensure the quality of pension provision.
The Work and Pensions Committee will shortly be publishing its report on automatic enrolment in workplace pensions.
The Committee now plans to launch an inquiry into governance and best practice in workplace pensions which will explore some of the wider issues raised in the auto-enrolment inquiry. It will also consider other issues affecting workplace pensions which were beyond the scope of the auto-enrolment inquiry.
Submissions of no more than 3,000 words are invited from interested organisations and individuals, addressing the following issues:
How to ensure Defined Contribution (DC) schemes deliver good outcomes for their members including:
- Transparency of charges and costs
- Clarity of communication to pension scheme members
- The Government’s proposals for managing small pension pots (and the related issue of short-service refunds)
- How DC scheme members can be supported to make investment decisions and assess risks, including when converting to annuities
- Managing investment risk and security of returns
- Whether greater economies of scale within the sector could produce better value for money for members and if so, how this can be achieved
- How to strike an appropriate balance between regulation, self-regulation and good governance which restores confidence and raises standards.
The implications of the changing balance between Defined Benefit (DB) and DC schemes including:
- The scope for collective DC schemes and other risk-sharing schemes
- The outlook for remaining DB schemes; whether “red tape” for these schemes could be reduced; and whether measures should be considered to tackle their decline.
The deadline for written evidence is Friday 13 April 2012.