Despite missing out on employer
contributions, nearly 7m people in the UK eligible to join a
defined contribution (DC) pension scheme have failed to do so, a
shortcoming workplace pension scheme body the National Association
of Pension Funds (NAPF) is attempting to remedy.
Spearheading the NAPF’s efforts is its Pension
Quality Mark (PQM), a programme launched in September 2009 that
aims to encourage workers to join the DC scheme offered to them by
providing a clear signal that the scheme is a good one.
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To qualify for the PQM a scheme must meet set
criteria on contribution rates, effective governance and strong
communications.
From a contribution perspective contributions
of 10% must be available, with at least 6% paid by the employer. If
contributions are 15%, with at least 10% from the employer, then
schemes can apply for a Pension Quality Mark PLUS.
The standard takes account of different
contribution formulas, such as fixed, matching, age and
service-related.
By the end of February, 37 schemes with a total
membership of about 100,000 had received the PQM.
