The Pensions Regulator (TPR) has launched a regulatory initiative to check if defined contribution (DC) savers are benefitting from new rules that require trustees to assess whether they are delivering value for their members.

Under the initiative, TPR will be checking that trustees of DC schemes with assets under management of less than £100m are complying with new value for member regulations that came into force in October 2021.

TPR announced the plans after a survey of DC schemes carried out last year found that 17 per cent of schemes required to complete the new value for members assessment had done so, while nearly two thirds (64 per cent) were unaware of this statutory obligation.

The regulator said that it will therefore take a data-led approach in order to contact selected schemes about their value for members assessment, including those that have indicated they have failed the assessment, before checking that trustees have plans in place to improve their assessments.

Where improvements in compliance cannot be evidenced, TPR confirmed that it will ultimately expect trustees to wind up and consolidate into a better run scheme.

TPR executive director of frontline regulation, Nicola Parish, stated: “All savers deserve to be in schemes that provide value for money.

"Our regulatory initiative aims to ensure trustees in smaller DC schemes are properly assessing the value their members are getting.

“We will be reaching out to trustees we find in breach of their duties to understand how they will put things right, and if they can’t or won’t, we’ll expect them to wind up and put their members into a better run scheme.

"If necessary, we will consider using our powers to ensure savers are in schemes that are being run in their best interests.”

Final planning for the regulatory initiative is ongoing and communication to trustees is scheduled to begin later this year.

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