DC trust market grows again

The Pensions Regulator’s eighth edition of its survey of occupational DC trust-based schemes and memberships provides further evidence of the strong growth that has taken place in this market, with auto-enrolment being the principal cause.

The Regulator’s report shows that the number of trust-based DC members has increased significantly again, up by 1.6 million members since last year’s report (see Pensions Bulletin 2016/04) to 8.5 million.  Assets have increased by 17% this year, whilst contributions have increased by 23%.

In launching this report, the Regulator makes a point of a majority (55%) of all private sector workplace pension members being in DC schemes (including contract-based DC schemes) for the first time, with 86% of all those currently saving investing into a DC scheme.  It uses this as the premise on which to make some strong statements about parts of the DC trust market.

As in previous years the survey is based on information supplied via the scheme registration and scheme return processes and was extracted as at 31 December 2016.

PPF levy ceiling and compensation cap rise in line with average earnings

The ceiling that the estimated overall pension protection levy cannot rise above has been increased by 2.6% whilst the compensation cap has increased by 2.9%.  This is the substance of an Order made by the Department for Work and Pensions.

The Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling and Compensation Cap) Order 2017 (SI 2017/50) provides that the ceiling for the 2017/18 pension protection levy will be £1,007,249,095.  The increase follows that of the general level of earnings – and is by reference to the year ending July 2016.

The same Order also provides that the PPF compensation cap rises to £38,505.61 from 1 April 2017.  The increase also follows that of the general level of earnings – but is by reference to the year ending April 2016.

This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law.  For further help, please contact David Everett at our London office or the partner who normally advises you.