In a blog post published on November 15, 2023, the Regulator outlined its strategy to transform UK workplace DC schemes into "full-service providers" that will provide support to members when saving into a pension, accessing their savings and post-retirement.
The Regulator acknowledged that some DC scheme trustees do not have the skills, capability, or appetite for this outcome, and urged them to ask themselves "tough questions" and consider consolidation in savers' interests.
The blog refers to the Regulator's five principles on "what good looks like" to guide this transformation. These are: maximising value for money; mitigating risks; offering personalised decumulation options; and providing comprehensive saver support in the lead-up to, and during, decumulation and post-retirement. Some key challenges in turning these principles into a reality include:
- Assessing value for money in decumulation services - the focus should be on a holistic assessment of value rather than cost alone.
- Increasing range of products – work is progressing on bringing CDC schemes to the market, including decumulation-only models in due course.
- Managing multiple small DC pension pots - ahead of any long-term options from government, the Regulator would like schemes, including master trusts, to encourage pot consolidation.
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