Pensions Minister, Laura Trott, has highlighted fairness, adequacy and predictability as the three key pillars behind the government’s new package of defined contribution (DC) measures.

Announcing the reforms at the Pensions and Lifetime Savings Association (PLSA), Trott acknowledged the complexities surrounding pensions, stating that the shifting pensions landscape has seen “increased risk and uncertainty compared to decades previously and often less adequacy”.

While Trott emphasised the success of auto-enrolment from a coverage perspective, she also clarified that there needs to be a focus on “quality and outcomes”, with the latest package of DC measures therefore aiming to address pensions inequality concerns.

She stated: “Having created a new generation of savers, it’s only right that we help them maximise the value of their hard-earned retirement in later life.

“Alongside a record number of workplace pension savers and assets, there’s more choice and more freedoms. But with more choice, comes increased variability in terms of the retirement outcomes that schemes are delivering for savers.”

"On fairness, if your scheme is underperforming and you don’t know about it, you could be losing out on thousands of pounds. This simply isn’t fair. Bringing fairness to our new system is the first pillar of my vision for pensions.

“All savers deserve to be confident that their pension scheme is working hard on their behalf and on track to deliver fair and predictable outcomes – reassurance that the generations that proceeded them would have had from their defined benefit (DB) pensions.

“When I talk about value for money, I don’t just mean low costs. Value for money means that savings are invested well, they are not being eroded by high charges and that schemes are helping members make the right decisions throughout their accumulation period.

“It will help to deliver long term value for hard-working savers, and it proposes giving the regulator the powers they need to tackle underperforming schemes.”

Trott also emphasised that the measures are "just one part" of the DWP's wider reforms to the private pension sector, arguing that, together, these efforts "recognise and respond to a sector that has undergone significant change over the past few decades".

In a Q&A session, PLSA policy board chair, John Chilman, queried whether the government was considering legislating on some of the proposals in the consultations, including its value for money framework.

While Trott emphasised the need for industry feedback in her response, she also stressed the need for The Pensions Regulator (TPR) to be given the powers needed to take action where needed.

"We're doing a consultation on this at the moment and we'll look at the responses to that, but I think it's important that the regulator has the power to be actually act.

"This is not just something that is theoretical. Transparency is important but it will also lead to real action from the regulator where schemes are and not doing what we need to do."

When asked by Chilman as to whether the government was considering legislating in relation to small pots, Trott again emphasised the need for the government to first consider industry feedback.

"I think it's fair to say that there is disagreement amongst many people in this room as to exactly what we should do, and I think that's why it's important that we do this last call for evidence," she stated.

"I think the pot follows member has many advantages but there are other schemes that are out there that we need to kind of look at and the next steps will be dependent on what the call for evidence says."

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