Under the Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021, which came into force in October 2021, trustees of DC schemes with total assets of less than £100 million must carry out a value for members (VfM) assessment.
According to the DWP's statutory VfM guidance, if, having completed the VfM assessment, the trustees conclude that the scheme does not provide value for members, they should look to wind up the scheme and transfer members' rights into a larger occupational or personal pension scheme, or set out the immediate action they will take to make improvements.
In a recent press release, the Regulator reports that its pilot initiative to help drive consolidation is already having an effect. Some 16 per cent of schemes taking part in the exercise, having concluded that their schemes do not offer good value, have opted to wind up.
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