The number of occupational defined contribution (DC) schemes in the UK has declined by nearly 40% in a decade while aggregate asset values are up 413% since the beginning of 2012, according to figures from The Pensions Regulator (TPR).
As of December 2021 the number of DC schemes, including hybrid schemes, stood at 27,700, down from 45,150 as of September 2011. The number shrank by 2% since TPR’s last annual DC Trust report, published in March last year.
The number of master trusts – multi-employer schemes – also dropped, from 38 to 36, since the last report although memberships increased by about 10% from 18.8 million to 20.7 million.
Assets in master trusts, excluding hybrid schemes, increased almost 50% from £52.7bn (€63.2bn) to £78.8bn since TPR’s last report.
The number of master trusts is set to drop to 35 imminently, with Cushon having recently announced the planned acquisition of Creative Pension Trust, which it said would make it the fifth largest master trust pension provider in the UK.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Landsown, also flagged that the number of schemes with more than 5,000 members hit 140 recently, up from 80 in 2021. The number of schemes with between 12-99 members collapsed, declining from 2,260 to 660.
Occupational DC schemes by membership size group (incl. hybrid schemes): 2012-2022
LGPS Central makes net-zero commitment
LGPS Central, one of the eight local authority pension asset pools, has set out a 2030 target as part of a commitment to achieve net-zero emissions across its portfolios by 2050 or sooner.
In a net-zero statement, it said it will aim to achieve, by 2030, a 50% reduction in greenhouse gas emissions associated with its equity and fixed income portfolios.
The pool, which is comprised of eight partner funds, said it would be using the Institutional Investor Group on Climate Change’s Net-Zero Investment Framework in pursuit of its goals.
“This commitment provides us with a set of measurable targets, a common focus and renewed momentum for our climate strategy and associated engagements,” said Patrick O’Hara, director of responsible investment and engagement. “We look forward to playing our part as responsible corporate owners in driving the transition to a low carbon economy.”
LGPS Central’s eight partner funds have combined assets of £49bn. Some £23bn of these have been pooled in LGPS Central.
Standard Life takes up PLSA Retirement Living Standards
Standard Life has updated its client analytics tool with new functionality that gives users, including trustees, “unprecedented insight” into the expected Retirement Living Standards (RLS) of their workplace pension scheme members.
The RLS were developed by the Pensions and Lifetime Savings Association (PLSA) to support better saver engagement by helping people picture the lifestyle they want when they retire and to understand the cost.
The change that Standard Life has made means that users of its client analytics tool will be able to view what proportion of their scheme members are on track for a ‘Comfortable’, ‘Moderate’, or ‘Minimum’ income in retirement, as defined by the PLSA.
The provider said that using the PLSA’s updated retirement income targets as the basis of this development, it had bolstered its internal modelling to include a scheme member’s own Standard Life pension assets, the state pension and a proxy measure for workplace pension assets that may have been accumulated elsewhere.
It said that although the calculation basis as complex, the output generated for pension schemes had been simplified by distilling the data and calculations into easy-to-understand charts that provide users with a snapshot of the expected RLS for their scheme members.
Nigel Peaple, director of policy and advocacy at the PLSA, said Standard Life’s innovation would “be beneficial in helping employers engage workers with their pension savings and transform the way people think about the way their saving habits today will provide an income later in their lives”.
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