PMI response to the Department for Work and Pensions' discussion paper on the key elements of the Scale Policy

The Pensions Management Institute (PMI) has responded to the Department for Work and Pensions' discussion paper on the key elements of the Scale Policy, backing measures that can improve outcomes for pension savers while calling for a proportionate and flexible regulatory framework that supports innovation, effective governance and good member outcomes. 

Helen Forrest Hall, Chief Strategy Officer at the PMI, said:  

"We welcome the Government's ambition to strengthen the pensions system by encouraging greater scale where it can deliver better outcomes for savers. Larger schemes can benefit from stronger governance, enhanced investment capability and greater efficiency, helping to improve value and retirement outcomes for members. However, we believe scale should be a means to an end, not an end in itself. The success of the policy should ultimately be judged by whether it delivers tangible benefits for savers. 

"We support consolidation where it demonstrably improves member outcomes, but we believe the regulatory framework must remain proportionate and flexible. Trustees and providers should retain the ability to develop investment strategies that reflect the needs of their members, rather than being constrained by overly prescriptive rules that could limit innovation or restrict good decision-making. We want to see a framework that focuses on outcomes, while recognising that different approaches can still benefit from the advantages that scale provides. 

"We have also highlighted the importance of practical implementation. We support the availability of transition pathways for schemes working towards the new scale requirements, provided they are based on credible plans and realistic assumptions rather than rigid forecasts of future growth. At the same time, we have called for closer coordination between DWP, The Pensions Regulator and the Financial Conduct Authority to avoid duplication, reduce unnecessary burdens and provide greater certainty for schemes and providers operating across different parts of the pensions market. 

"Ultimately, we believe the scale agenda should help drive higher standards across the pensions sector while preserving the flexibility needed to act in savers' best interests. A successful policy will not simply create fewer, larger schemes. It will create schemes that are better governed, better equipped to invest effectively and better able to deliver improved outcomes for members." 

Read the full response here.