Pensions World

End of year roundup - January 2012

Defined benefit (DB) schemes continued to feel pressure on their funding positions, defined contribution (DC) came under greater scrutiny and the industry started preparing for the forthcoming pension reforms that will see between 5 and 8m people saving more or saving for the first time.

Getting ready

We stepped up our preparations for auto-enrolment early in the year by publishing detailed guidance for advisers, large employers and those with a good knowledge of pensions, as well as interactive tools to help smaller business begin to make preparations and checklists for trustees and employers. In addition, we started issuing letters to the UK’s largest employers advising them of their "staging" dates.

We also announced our partnership with Capita, which is taking on the high volume direct communications to employers, intermediaries and advisers. We will remain committed to providing information and support to help businesses of all sizes to get ready.

Most members will be automatically enrolled into DC schemes so we have been placing even more focus on ensuring that standards are high in these schemes. As it is the members who bear most of the risk, it is important that the schemes are well run and provide the best possible outcome for savers when they retire. We published a range of guidelines to help improve the running of DC schemes, including a discussion paper on how we might support the DC market, a statement on the role of DC trustees and six principles around what a good DC scheme should look like.

Despite the evolving landscape and the rise in DC, DB remains a significant part of the picture, with over 12m members and over £950bn of assets. We have dealt with some complex and high profile situations and we published a number of reports under s89 of the Pensions Act that detailed some of our recent cases, including Bonas, Great Lakes and Polestar. These reports will also help the industry understand more about how and when we might investigate employer or scheme activity as part of our drive to be more open and transparent about our case considerations. We will be publishing more of these in the future, as well as communicating further about our strategic approach to DB schemes.