OFT to probe workplace pension schemes

The investigation aims to ensure that employers and staff get a good deal as they are automatically enrolled in Defined contribution schemes or DC.

10:14 22 January 2013

The Office of Fair Trading or (OFT) is set to investigate pension firms that run defined contribution schemes for employers.

It is believed that nine million workers will be automatically enrolled in the scheme thus, it’s crucial for OFT to ensure that the employers and staff will get a good deal.

The Association of British Insurers appreciate OFT’s goals, according to reports.
 
"The pensions environment is changing dramatically and auto-enrolment is set to bring millions of workers into pension savings," said Otto Thoresen, director general of the ABI.

"Pension charges have fallen to their lowest level, and industry initiatives are set to ensure charges and costs are disclosed clearly in a consistent format, and that people nearing retirement get more help to get the best pension deal," he added.

 

DC schemes are contributions coming from employers and staff to build up a pot of money. It’s designed to be used when workers retire to buy an annual income.

 

Unlike final-salary scheme, DC does not provide guarantees that the members will receive specific amount of money or particular level of pension when they retire.