Standard Life has called for a member-outcomes-focused approach to the Government’s plans to encourage greater scale within the workplace pensions market.
Responding to the Department for Work and Pensions’ discussion paper on the key elements of its proposed Scale Policy, Standard Life said it supports efforts to help pension savers benefit from the advantages that larger schemes can offer.
Emma Furlonger, managing director of workplace and retail intermediary at Standard Life, said the provider backed the Government’s ambition to improve long-term outcomes for members.
“We support the Government’s ambition to help workplace pension savers benefit from the advantages that scale can bring, including improved long-term outcomes, stronger governance and more sophisticated investment strategies.”
However, she said any future Main Scale Default Arrangement framework should focus on the outcomes delivered to savers rather than prescribing how schemes invest.
“While consolidation has an important role to play in creating a more efficient pensions market, it’s essential that the introduction of a Main Scale Default Arrangement framework focuses on the outcomes being delivered for members rather than prescribing a single investment approach.”
Furlonger said providers should retain flexibility to achieve common investment objectives through different structures where this is in members’ best interests.
She added that regulation should recognise that scale can already be achieved through shared investment capabilities, governance frameworks and underlying investment building blocks, rather than requiring identical fund structures or asset allocations.
“This will help avoid unnecessary fund mergers or member movements that do not improve outcomes.”
The comments come as the Government continues to examine ways to encourage greater scale within the defined contribution pensions market, with the aim of improving value for savers and increasing investment opportunities.
Furlonger said Standard Life looked forward to working with policymakers and regulators on the development of the framework.
“We look forward to working with Government and regulators to develop a framework that supports innovation, enables investment in a broader range of assets and ultimately delivers better retirement outcomes for millions of UK savers.”
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