The Pensions Regulator outgoing chairman David Norgrove will today unveil plans to ramp up scrutiny of defined contribution schemes ahead of the 2012 reforms.
In his final speech before he leaves the post at the end of the year, Norgrove (pictured) will outline the regulator’s strategy, including a consultation in early-2011 seeking industry views on how to ensure “safe and secure” DC pensions for the future.
He will say: “In trust-based DC schemes the accountability is clear. There is less clarity in DC contract-based schemes. We have been liaising with our colleagues at DWP, the FSA and Treasury, as well as with major players within the pensions industry, to explore what a safe, secure and sustainable DC market might look like.
“In the new year we plan to consult with the industry on our thoughts in this area, with the aim of publishing a revised DC regulatory framework in late 2011.”
Norgrove is also set to issue a final warning to trustees of schemes involved in enhanced transfer value, or ETV, exercises. He will reiterate the “concerning behaviour” the regulator has witnessed in this area, including daily phone calls, emails and home visits being used to pressurise members into switching from a defined benefit to a DC scheme.
He will add: “Offers that involve cash incentives are likely to result in less objective decision making, and members may struggle to evaluate the strength of the offer in the context of the benefits they are giving up and the risks that are being transferred to them. They need to be able to make an informed choice, and take such decision with their eyes open.”