TPR occupational DC landscape report

Commenting on the occupational DC landscape report by TPR, Shabna Islam, Head of DC Provider Relations, Hymans Robertson, said:

“Consolidation and concentration across the defined contribution (DC) pensions market continues to accelerate, particularly for smaller schemes. We’re seeing increased activity amongst smaller schemes opting to consolidate in response to rising regulatory and governance pressures, including forthcoming Value for Money (VFM) assessments and guided retirement solutions. For many smaller schemes, the cost and complexity of meeting these expectations are prompting earlier consolidation decisions, particularly amid concerns that provider capacity could tighten and limit their options if they leave it too late.

“Demographic trends need to be managed carefully. A growing deferred member population is worsening the challenge of small pots, increasing administrative burden and inefficiency. Industry developments such as pensions dashboards and smoother digital transfer journeys implemented by DC providers are expected to support this challenge by making it easier for members to engage and consolidate their savings.

“Average DC assets per member are increasing, driven by ongoing contributions and investment growth. However, DC pots on average remain well below adequate levels for a moderate or comfortable retirement income. DC master trusts will benefit from growing assets, allowing them to achieve main scale default requirements sooner and strengthen their position in an increasingly active market.”

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