Small, underperforming pension schemes may be forced to close or merge with larger funds under proposals being explored by the Pensions Regulator.
In a discussion paper published today, TPR warns there could be a “whole class of pension scheme members who may be subject to unfavourable outcomes just because of the size of scheme they belong to”.
The regulator asks respondents for views on whether it should intervene to force small schemes to “exit the market or to consolidate into larger scale provision”.
The paper also highlights the challenges faced by lay trustees to keep on top of regulatory changes and have sufficient knowledge to oversee schemes.
As a result, it asks whether trustees should have a requirement to hold relevant qualifications.
It says: “Some of the trustees and stakeholders we talked to also suggested that all trustees, not just professionals and chairs, should be able to demonstrate a minimum level of competence.”
Responses must be sent to the regulator by 9 September 2016.