The Pensions Regulator

Pensions Regulator encourages voluntary employer engagement in GPPs

Ref: PN08-01
31 January 2008

The Pensions Regulator has today (Thursday) published guidance on voluntary employer engagement in GPPs.

The guidance provides support to employers who offer a contract-based defined contribution (DC) pension scheme by:

• Identifying ways in which they might choose to be involved in the governance of the scheme - referred to as 'employer engagement';
• considering employer engagement options, for instance by involving advisers, employer representatives, employees, management committees and trustees in reviewing the operation of the scheme; and
• describing the specific functions an employer may like to consider for review.

Case studies provide employers with practical examples of effective engagement.

Chief Executive Tony Hobman said: "Many employers have already put in place voluntary governance arrangements as they see them as beneficial for both themselves and members. This guidance is designed to support employers who choose to be involved in the governance of the scheme by identifying options and sharing case studies."

Alongside the guidance the Pensions Regulator has also published a Defined Contribution Update. The update details the progress towards meeting the regulator's commitments in relation to work-based DC schemes, forthcoming guidance and also includes extensive independent qualitative research findings.

Editor's notes

1. The guidance on voluntary employer engagement in work place contract-based schemes and the Defined Contribution Update can be found on the Pensions Regulator's website: http://www.thepensionsregulator.gov.uk/
2. The guidance is voluntary and there is no statutory requirement for employers to follow what is set-out. However, all employers must ensure that they comply with their legal obligations (for example, payment of contributions on time).
3. The guidance has been produced in consultation with the Financial Services Authority (FSA). Both the FSA and the Pensions Regulator have a regulatory role in relation to workplace contract-based pensions and have a Memorandum of Understanding that sets out how the regulators work in practice.
4. The Defined Contribution Update relates to work place DC schemes, which includes trust-based schemes, contract-based group personal pensions with a direct payment arrangement and stakeholder pension schemes.
5. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004.
6. The powers of the Pensions Regulator include the ability to:

• collect more detailed scheme information;
• issue improvement notices and third party notices, enabling the  regulator to ensure problems are put right;
• freeze a scheme that is at risk, while the regulator investigates;  and
• prohibit trustees who are judged not fit and proper to carry out  their duties.
  
  The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.