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DC Trust 2013 published

Ref: PN13-05
Wednesday 23 January 2013

The Pensions Regulator has today published a snapshot of the current landscape of occupational trust-based defined contribution (DC) pension provision in the UK.

To enable comparisons over time, this year’s release includes data spanning four years, 2009 to 2012, with all figures as of 31 December in the relevant year.

Headline findings:

  • DC memberships now account for 27% of the workplace pensions memberships.
  • 30% of active DC members are in trust-based schemes and 70% of active DC members are in contract-based schemes.
  • The number of schemes has dropped by over 40% since 1997. However, although the number of schemes has declined significantly, the number of memberships has declined considerably less – just 6%.
  • Over the last four years, the number of ‘micro schemes’ has declined by nearly 9,000 – 20% - compared to a smaller decrease of about 1300 in the number of small and medium schemes and a relatively consistent volume of large schemes.
  • The number of small and medium schemes reduced from 4,180 in 2009 to 2,870 on in 2012, a drop of 31%.
  • The mean average assets per member in schemes with more than 12 members has increased year on year for the last four years, from £14,400 at the end 2009 to £18,900 at end 2012 (not index-linked).
  • The proportion of members aged 50 or above has increased from 18% in 2009 to 24% in 2012.

The regulator’s head of DC regulation Darran Burton said:

“We are focused on achieving good outcomes for members of all DC schemes, both the existing stock of schemes and new offerings for automatic enrolment.

"Our research clearly demonstrates that large DC schemes are better able to deliver value for money and good governance. These figures point to a significant reduction in the number of micro schemes, with a more slight reduction in the numbers of smaller schemes.

"In light of the huge rise expected in DC memberships as a result of automatic enrolment, we also intend to increase the information we hold in key areas such as the movement of memberships and scheme assets.”

Editor's notes

  1. The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund; and to promote, and to improve understanding of, the good administration of work-based pension schemes.
  2. DC trust: presentation of scheme return data is an analysis of the information that occupational trust-based DC schemes are required under legislation to provide to The Pensions Regulator. There are approximately 2.6 million members in DC contract-based schemes. The regulator works jointly with the Financial Services Authority (FSA) to regulate contract-based DC schemes (also known as work-based personal pensions made up of group personal pensions and group stakeholder pensions). Contract-based schemes are subject to a different regulatory framework to trust-based provision and are therefore outside the scope of this statistical release. Individual personal pensions fall outside the regulator’s remit.

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