The Department for Work and Pensions (DWP) has stated that it will not be introducing any new regulatory requirements with the sole purpose of consolidating the defined contribution (DC) pension market in 2022.

In its response to its consultation, Future of the defined contribution pensions market: The case for greater consolidation, the DWP said that it remained concerned that members were suffering in poorly performing schemes.

However, it stated that the government had faith that ongoing interventions and proactive trustees will ensure that members are the “primary and only consideration” when deciding the fate of a pension scheme.

Furthermore, the DWP was encouraged by data from The Pensions Regulator (TPR), which showed that consolidation was continuing to take place at a “healthy pace” year-on-year.

It will continue to work with TPR to monitor the impact of the value for members’ assessment, which will start to be produced this year.

“Our focus will continue to be on creating, with TPR and the Financial Conduct Authority (FCA), a value for money framework for occupational and workplace pension schemes,” the response stated.

“Building on the work already done, considering responses to the discussion paper issued by TPR and the FCA, DWP will work with regulators to create a framework that brings about consistent, informative, member-focussed value metrics that will enable comparison and encourage competition on overall value.

“We believe this will improve member outcomes more so than targeted consolidation measures.”

The government’s consultation had sought views on the barriers and opportunities for increased consolidation amongst DC schemes with between £100m and £5bn in assets.

It was also seeking views on the barriers to schemes with less than £100m winding up and consolidating, and what ideas the industry has on how these barriers can be overcome.

Responding to the consultation, industry experts had warned that the proposals risked taking consolidation “too far, too soon”.

Concerns were also raised that driving regulation in this area too soon could risk losing a “golden opportunity” to learn from innovation.

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