The latest Pension Trends statistics, published today (Tuesday) by the Office for National Statistics, show that the number of people saving in a contract based defined contribution (DC) pension scheme through their workplace has overtaken the number saving in a trust based DC scheme this year.
The figures show that 8.8 per cent of the private sector
workforce are now in a contract based DC pension - up from 8.6 per cent last
year - while 8.7 per cent are now in a trust based scheme, a fall of 0.2 per
cent in a year.
Commenting on the figures, Midlands TUC Regional Secretary Rob Johnston said:
"Few will be surprised at the decline of defined
benefit pensions, but the growth of contract DC at the expense of trust based
DC should not be over-looked.
"Of course some contract based schemes offer good
value and some trust based schemes are not as well run as they should be, but
this trend is extremely worrying.
"In a trust based scheme trustees have a single duty
- to look after the interests of all scheme members both active and deferred. A
contract based scheme in contrast is normally provided by a company seeking to
make a return to its shareholders.
"While market forces can often be relied on to keep
costs down, decades of experience show that markets don't function when it
comes to pension provision - especially as it is not even the consumer that
buys a workplace pension, but their employer.
"With the introduction of auto-enrolment bringing a
huge increase in DC pension saving over the next few years, we need to ask hard
questions about how we can deliver good governance, low charges and
sophisticated investment strategies."
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