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Eversheds comment: Onus on UK pensions industry after OFT decides not to refer DC pensions to the Competition Commission

  • Africa

    13-02-2014

    In a report published today, the UK Office of Fair Trading (OFT) has decided not to refer 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.

    Commenting on the OFT’s decision, Francois Barker, head of pensions at global law firm Eversheds, says:

    “The OFT has said that it does not intend to refer DC pensions to the Competition Commission ‘at this time’. 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, it decided not to make a referral because it expects its proposed remedies and recommendations to address these issues.

    "This 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.”

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