PMI Response to DWP’s discussion paper on key elements of the Scale Policy

The Pensions Management Institute (PMI) welcomes the opportunity to respond to the Department for Work and Pensions' discussion paper on the key elements of the Scale Policy.

The PMI supports the underlying principle of the Scale Policy. Larger pension schemes and default arrangements are more likely to deliver better member outcomes through economies of scale, greater investment capability, stronger governance, and access to investment opportunities that may not be available to smaller schemes.

The PMI also supports the principle of consolidation where it can deliver better value and outcomes for savers. However, scale and consolidation should not be regarded as ends in themselves. Consolidation can involve costs, resource requirements and risks, and the benefits of scale should be demonstrated through improved member outcomes.

We therefore support the policy direction established by the Pension Schemes Act 2026, including the requirement for relevant DC multi-employer schemes to have a Main Scale Default Arrangement (MSDA) of at least £25 billion from 2030, or to enter an appropriate transition pathway towards £25 billion by 2035.