The UK’s Pensions and Lifetime Savings Association (PLSA) has released its four-year work plan, and consolidation is among the main themes the trade group will focus on.
In the outline for its plan, the PLSA said that because larger pension plans tend to have higher quality and performance, it welcomes the current trend toward consolidation. It said it is playing a major role in the development of defined benefit superfunds, and estimates they could increase security for 11 million members. However, the PLSA also said that scale should not be pursued as an end to itself as smaller plans can also deliver some or all of the same benefits as large ones.
In addition to consolidation, the PLSA is focusing on three other major themes: well-run plans, effective engagement, and adequate contributions.
The focus on well-run plans will cover cost transparency, value-for-money, sound investments, and stewardship. Specific work areas include the Cost Transparency Initiative, which is a partnership among the PLSA, the Investment Association, and the Local Government Pension Scheme (LGPS) Advisory Board to implement industry standards to improve transparency in investment costs and charges.
Work in the area of effective engagement will include developing quantifiable saving targets to help the industry communicate people’s likely lifestyle in retirement and help them understand the impact of savings decisions. The PLSA is also helping develop the Pensions Dashboard and Simpler Annual Statements to help people understand their savings.
And in its focus on adequacy, the PLSA’s aim is to increase auto-enrollment contributions to 12% by 2030, while taking into account the affordability of higher contributions and widening the scope of automatic enrollment. It will also introduce the new Pension Quality Mark Standards, which will reward well-run plans that offer 12% contributions.
“The defined benefit funding regime will be another specific focus of the PLSA over the next four years,” the association said. “2019 is set to be a particularly important year for DB funds with Parliament debating a new Pensions Bill which will give greater powers to The Pensions Regulator.”
The four-year plan was put together by the PLSA’s Policy Board, which was formed in October to help the association guide and decide on public policy positions. The board has formed four new subcommittees of eight to 10 members each to help implement the work program.
The four committees represent the defined benefit, defined contribution, local authority, and master trust segments of the industry. They will inform the PLSA’s consultation responses, sit on industry working groups, and support the PLSA in representing policy positions to government, regulators, and stakeholders. They will also provide advice to the Policy Board on certain policy matters as requested by the Policy Board.