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Pensions: New rules for Defined Contributions schemes

Shona Harvie
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The government has published its response to the consultation on the draft regulations for Defined Contribution schemes (DC). The regulations introduce requirements to publish further charge and transaction cost information. This information must be included in the DC chair’s statement within the annual report and publicly on a website.

What the new regulations do

The new regulations are designed to:
  • introduce requirements for certain occupational schemes offering money purchase benefits to publish further charge and transaction cost information, disclose this to members and others, and tell members where to find it
  • introduce requirements for schemes to provide information, if a member or a recognised trade union asks, about the international securities identification number (ISIN) and name of pooled funds in which they are invested.
The aim is to promote a healthy market in an area which is seen as opaque. The disclosure of this information will enable Trustees and others to compare value for money and improve market outcomes.

What schemes need to do

From 6 April 2018 Trustees will have to:
  • provide an illustrative example of the cumulative effect of costs and charges incurred by the member as part of the chair’s statement
  • publish that and certain other parts of the chair’s statement (or all, if a scheme wishes to do so) on a website.
Schemes will be responsible for publishing information on costs and charges within seven months of the first scheme year-end date to fall on or after 6 April 2018. In practice this will generally first impact most schemes with year-end dates of 31 December 2018, 31 March 2019 and 5 April 2019.

What Trustees need to do

In order to abide by the new regulations, Trustees should start engaging with their investment managers to make sure that information can be provided in time to be published as required. Further information for Trustees can be found here:

How we can help

We can help Trustees complete the chair’s statement by drawing on our in-depth knowledge of standards of practice set out in regulatory guidelines. We can also support Trustees through the new disclosure requirements for costs and charges considered above. If you would like to discuss any of these aspects further, including how the new regulations will affect you, please contact your usual Crowe Pension Funds advisor or Phil Spary, Director in our National Pension Funds Team.

Contact us

Shona Harvie
Shona Harvie
Partner, Pension Funds Group