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Number of active DC savers overtakes DB – latest DC Trust stats

Ref: PN15-07
Friday 30 January 2015

Automatic enrolment has led to active defined contribution (DC) memberships exceeding defined benefit (DB) memberships for the first time, new figures from The Pensions Regulator show.

The regulator has published its sixth annual statistics report on DC occupational pension schemes, based on data covering around 40,000 private pension schemes, as of 31 December 2014.

Andrew Warwick-Thompson, the regulator’s executive director for DC and public service pension schemes said:

“This latest data snapshot clearly shows the impact automatic enrolment has had on the DC landscape. Although more assets are still held in DB schemes, for the first time there are now more active members in DC schemes.

“We also see from these latest statistics that the number of micro DC schemes continues to reduce. We are encouraged to see a further reduction in unsustainable, poor value schemes, with movements of memberships and assets to larger multi-employer schemes that are able to offer better governance and value for members, such as master trusts.

“With master trust membership numbers due to increase further, we will continue working with this key area of the DC market to ensure that the very highest standards are embedded across the sector.”

This year’s data release includes some new information, including the use of schemes for automatic enrolment, the total amounts transferred into schemes, and whether schemes can be classed as small self administered schemes.

Some of the key findings include:

  • The total number of DC memberships of occupational schemes with 12 or more members increased by 80 per cent (from 2.5 million to over 4.5 million).
  • Active membership increased by 140 per cent (from 1.3 million to over 3 million).
  • There are 300 DC trust schemes being used for automatic enrolment. Of the 70 master trusts, 20 are used for automatic enrolment and collectively hold more than 2 million members.
  • Reported assets in non-micro DC schemes increased by 11% (from £26 billion to £29 billion).
  • DC schemes received net transfers of £398 million (transfers in £591 million, transfers out £193 million). 60% (£365 million) of transfers in were to schemes with 5,000 or more members.
  • Micro schemes (schemes with 2 to 11 members) and membership numbers in these schemes continued to reduce (by around 3% – schemes dropped from 35,600 to 34,400 and membership dropped from 102,000 to 99,000).

This statistics release can be read in conjunction with the regulator’s automatic enrolment publications including its monthly registration reports, which provide the latest membership information as a result of the reforms.

Editor's notes

  1. The information in this statistics release is based on data provided by schemes on returns we issued from July to December 2014 and related to the levy year 2013-2014 or earlier. Therefore the figures may not yet reflect all changes in DC memberships (including from automatic enrolment) from October 2012 through to December 2014.
  2. The scheme return is how we collect information about occupational schemes. DC schemes with 12 or more members complete a scheme return annually and schemes with 2 to 11 members complete once every three years.
  3. 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 (PPF); to promote, and to improve understanding of the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).

Press contacts

Katherine Long 01273 811859

Matt Adams 01273 662086

www.thepensionsregulator.gov.uk

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