The Pensions Regulator published new survey-based research on trust-based defined contribution (DC) and defined benefit (DB) pension schemes, finding that almost nine in 10 DC savers are in schemes that invest in at least one “productive” asset class such as infrastructure, private equity, venture capital or renewables. The research also indicates that larger DB and DC schemes are more aware of, and engaged with, governance than smaller schemes, supporting more informed decisions on diversification, cyber security and environmental, social and governance. Reported holdings of productive assets varied by scheme type, with 45% of DB schemes, 57% of large DC schemes and 72% of DC master trusts saying they hold some productive assets in the UK or overseas. In smaller schemes, 57% of small DC schemes and 70% of micro schemes said they did not know whether their scheme held these assets, which TPR linked to potential weaknesses in governance and a risk of falling short of its expectations. TPR reiterated its work to tackle poor governance in small schemes by probing compliance with the legal duty to carry out detailed Value for Members assessments, developing a Value for Money framework with the Department for Work and Pensions and the Financial Conduct Authority, and moving to a more proactive supervisory approach, while calling on trustees to work with investment advisers on well-diversified investment strategies. TPR also pointed to its ongoing initiative to test DC trustees’ value assessments, which has led nearly one in five engaged schemes to conclude they do not offer value and opt to wind up, alongside more than GBP 33,000 in penalties for non-compliance, with further penalties expected.

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