Onus on UK pensions industry after OFT does not refer DC pensions to CC, says Eversheds

Francois Barker, head of pensions at Eversheds, has commented on the UK Office of Fair Trading’s (OFT’s) decision not to refer defined-contribution (DC) pensions to the Competition Commission. This is despite the various weaknesses with the DC pensions market that were identified in the OFT’s DC market study last September.

Barker said that the OFT considered that the threshold for making a referral was met and that the weaknesses that it had identified with the DC pensions market in its market study last year were likely to have a significant detrimental effect on consumers. However, he said, the OFT decided not to make a referral because it expects its proposed remedies and recommendations to address these issues.

He added: ‘The OFT has left open the option of a future referral. Therefore, the onus is now on the pensions industry and government to take steps to address the concerns identified in the OFT’s market study.

‘Central to this is the need for pension providers to introduce independent governance committees for contract-based schemes and for trustees of occupational DC schemes to ensure that they have effective governance arrangements in place.’