From April, all insurance companies providing workplace pension plans must establish an independent governance committee, warns Matthew Binnington
Way back in 2013, when life was simple and the summers long, the Office of Fair Trading (OFT) conducted a market study into all defined contribution (DC) pension schemes, both contract- and trust-based. The report that followed concluded that competition alone would neither drive value for money in pensions, nor adequately protect the interests of consumers. The reasoning: pensions are complicated, costs are opaque and quality is difficult to gauge, since outcomes only transpire many years into the future. Furthermore, the OFT noted significant weakness on the buy side of the market, with scheme members relying on their employers to make key pensions decisions, while those employers often lacked the capacity and incentive to ensure that members’ interests were protected.