3/25/2026 2:14:13 PM | 1 minute read

Key DC issues to think about

Get in touch

Karen Mumgaard

Knowledge Counsel

Get in touch

Karen Mumgaard

Knowledge Counsel

We have been thinking a lot about the future of DC pension provision in the context of both the Pension Schemes Bill and our recent webinar. Given that the Bill is nearing the end of its passage through Parliament, it seemed a good time to set out what we think the key issues to think about are.

Key things to think about for providers

Will you have access to a main scale default fund of £25bn by 2030 or will you need to apply for transitional relief and, if so, when will you apply for this?	Are you ready for the value for money assessment? Would your default arrangements provide value and if not, what changes should you make?
Do you need to reassure the market that you will have sufficient scale? What are consultants advising sponsors?	Will you apply for authorisation as a small pot consolidator? Watch out for detail on the process.
What will your default retirement solutions be? How will you assess this? Will you develop a targeted support proposition for members on retirement? Might you offer retirement CDC?	Watch out for more on quantitative investment requirements and statutory guidance from government. Consider what impact it would have on current investment strategies.

Key things to think about for sponsors and trustees

Sponsors	Trustees
Do current auto-enrolment arrangements meet the scale requirements? If not, will they get there or might you need to change scheme?	Can you provide a default retirement solution in-scheme, or will you need to team up with a provider? How will you assess the needs of members?
Are you going to monitor whether your auto-enrolment arrangements provide value under the new regime?	Be aware of the administration and communication requirements around small pot consolidation.
Consider what default retirement solutions your auto-enrolment scheme will offer your employees as you might encounter queries on this.	Value for money data will need to be collected as at 31 December 2027. Are you ready for this? Can your advisers provide the required information?

There is a lot to think about for the whole industry! The future will have fewer, larger schemes and possibly more CDC schemes. Member retirement processes will be streamlined and the dashboards may lead to greater member engagement.

There may also be more changes to come when the Pensions Commission reports next year.