Managing DC benefits
You need to focus on a number of areas if your scheme provides defined contribution (also known as ‘money purchase’) benefits.
These will help you to meet your legal obligations and ensure your scheme is well run and more likely to deliver good member outcomes.
The DC code sets out the standards we expect you to meet when complying with the law. Each of the code’s six sections is supported by a guide that sets out practical guidance on how you can meet the standards:
1. The trustee board
Make sure you have the right people on the trustee board and a strong chair of trustees so that your pension scheme can be well governed and members’ interests are protected.2. Scheme management skills
Make sure your trustee board has the right governance and the skills and knowledge to work effectively together, and with pension scheme advisers, so that good decisions are made and members’ interests are protected.3. Administration
Good administration is the bedrock of a well-run scheme. Make sure your trustee board works well with your scheme administrator, and that you have the right people and processes in place to ensure members’ benefits are administered to a high standard.
4. Investment governance
Make sure you have the right investment governance arrangements, involving the right advisers, and that the investment strategies you put in place provide the best chance for your pension scheme members to get a good outcome.5. Value for members
Make sure you meet your legal obigation to assess value for members and you understand what elements contribute to the value your members get from your pension scheme.
6. Communicating and reporting
Make sure you understand your pension scheme members’ views and needs, and you communicate with them at the right time and in the right way to help them make good decisions. Understand your duty to prepare a chair’s statement and report information to us.
Prepare your DC scheme for Brexit
You should focus on areas such as investment, member communications and administration as the UK prepares to leave the EU.
Checking you run a quality DC scheme
You should check the quality of your scheme providing defined contribution (DC) benefits by referring to the DC code and related guides.What happens if you don't meet your duties
If the defined contribution scheme you run fails to meet legal requirements, we will consider various options (such as educate, enable or enforce) and take action where necessary.