TPR DC code comes into effect

The Pensions Regulator has published its regulatory guidance for defined contribution (DC) pension schemes to sit alongside its DC code, which came into effect on 21 November.

The code, which was consulted upon earlier in 2013, sets out practical guidance on how pension trustees can meet the underlying requirements of pensions legislation.

The code was laid before Parliament and the Northern Ireland Assembly in July 2013.

To coincide with the code coming into effect, TPR has also published a suite of information, including its compliance and enforcement policy for DC casework and updated good practice guidance on areas not covered by the code.

From 2014, TPR plans to undertake thematic reviews of the extent to which trust-based DC schemes are compliant with pensions legislation and associated good practice in different areas. Where necessary, it will take enforcement action to address breaches in the underlying law.

In 2014, TPR also intends to publish a template ‘comply or explain’ governance statement that DC trustees can use to inform scheme members, the employer and TPR whether they meet its six principles and 31 quality features for DC schemes, which it published in January 2013.

Andrew Warwick-Thompson (pictured), executive director for DC, governance and administration at The Pensions Regulator, said: “From today, we expect DC trustees to assess their scheme against the standards set out in the DC code.

“Our aim is to protect retirement savers and to ensure their money is invested in good quality schemes that are well-run in the members’ best interests.

“Schemes that fall short of these standards should expect some difficult questions, and they may incur enforcement action in order to rectify breaches in pensions law.

“We also urge professional advisers to familiarise themselves with the details of the code and guidance, as they have a key role to play in helping trustees review their scheme and make improvements to its quality where necessary.”