The watchdog said its analysis of decumulation products within defined contribution (DC) occupational pension schemes, published today (5 March), showed that some 13.4 million members were now offered drawdown at the point of retirement, a product not historically available within occupational schemes.

The analysis comes in advance of the introduction of guided retirement duty in the Pension Schemes Bill.

TPR said larger schemes were “leading the way” in supporting members when they come to retire – noting that some 86% of the largest schemes offer members at least one retirement income option.

TPR said the shift towards drawdown being offered in-scheme is largely driven by the growth of master trusts – schemes it said that have the scale and governance to make it a reality.

TPR director of policy Joey Patel said: “These findings herald a transformation in the DC workplace pensions landscape ahead of guided retirement duty, with millions of savers now able to access in-scheme retirement options. This is just the start, however.

“Too many members in smaller schemes are left without support when they reach retirement. This is not good enough.

“We urge trustees to start getting ready for the Pensions Schemes Bill by reviewing their offer and starting to design their decumulation products.”

Patel added:

“If you are not able to guide savers into the right retirement options for them, our message is clear: you should consider consolidation into a scheme that can offer value for money solutions.”

Torsten Bell said much the same thing at yesterday’s TUC conference. If there’s one point of the VFM initiative from FCA and TPR it is to make it so tough on DC pensions who fail to jump  the VFM bar that they have no choice to consolidate.

There is one exception to the “Size” game and that’s the UMES CDC scheme that is allowed to start small and big as if it were a new master trust.

We won’t see many new master trusts, but I hope for the sake of savers who want pensions, we get a few CDC schemes next year.

It is not expensive to run a payroll pension (any DB scheme will tell you that) but it is very hard to manage a fixed retirement income for as long as people need it, if you aren’t collective!

You have to be very big and friends with an insurer who pays annuities as you need them to. Rothesay have set the example with Nest and I hope that others will follow. Even so, it seems a tough way of going about it and I hope that as well as CDC “whole of life” schemes, we’ll see retirement CDC for those at that awkward moment when they choose to have their pot paid back to them.

The Pension Schemes Bill exempts CDC UMES schemes from the Size requirements that apply to multi-employer DC schemes.