UK - Defined contribution (DC) pension schemes are failing to achieve the most basic governance requirements, as defined benefit (DB) continues to take centre stage, Pitmans Trustees (PTL) has said.

The comments made by the trustee and governance service provider come after the publication of the Pension Regulator's annual survey of pension scheme governance.

The survey found that only 40% of DC schemes think their overall governance is very effective.
Richard Butcher, managing director at PTL, said: "The results are shocking. TPR's statistics imply that 60% of DC schemes aren't satisfied that their governance is very effective, 25% don't know whether the charges are good value, and 72% don't ensure good member communications.
"The minimum standard for any DC scheme, whether trust or contract-based, is to deliver a good member outcome."

He said members should be making informed decisions and "so their schemes should provide an environment that allows them to do this", or trustees or governors should be acting on the members' behalf by providing "dynamic and robust defaults".

He added: "These statistics clearly show most pension schemes are failing to achieve even these basic goals. DC schemes have long been the poor relation when it comes to pension governance.

"This is for a variety of reasons, including that trustees and the industry have been focused on resolving DB legacy issues. This has to change."
Meanwhile, the Pension Protection Fund has revealed that the aggregate deficit of the 6,533 schemes in the PPF 7800 index is estimated to have fallen to £8.3bn (€9.3bn) at the end of June from a deficit of £13.5bn at the end of May.

According to the Pension Protection Fund's data, the funding ratio has increased from 98.7% to 99.2% over the month, while the total assets stood at £1000.4bn and the total liabilities stood at £1012.3bn.

In total, 4,245 schemes were in deficit, while 2,288 schemes were in surplus.