Adapting to the changes that are sparked by auto-enrolment, the National Association of Pension Funds' (NAPF) Pension Quality Mark (PQM) is including a new standard for pension schemes that use a different type of charge.

The new standard for the quality mark continues to require that a scheme charges a maximum of 1% for both active and deferred members, but also makes it possible for schemes that have different arrangements, such as flat-rate charges or contribution charges, to be included. Previously, only defined contribution (DC) schemes that used annual management charges (AMCs) were able to apply for PQM.

The Pension Quality Mark was launched by the NAPF in 2009 to give recognition to pension schemes that have high standards of governance, communications and contributions.

The schemes that want to get awarded the PQM under the new standards will have to demonstrate that their charges are better than, or equal to, a 1% AMC for scheme members on half average earnings (£13,000 a year) in order to be included. This in order to ensure that the scheme also offers good value for people on a lower income.

Chris Hitchen, PQM's chairman, said: "Auto-enrolment will start unfolding in a few months and will change the UK's pensions landscape for the better by extending pension provision to millions of working people. [It] will also change the way pensions are provided with new types of schemes and new types of charging structures.

"Today's announcement ensures that PQM keeps pace with developments in the pensions market while maintaining a focus on low charges and value for money. This will be an essential ingredient in re-building public confidence in pensions."

Currently 152 schemes, which together cover 300,000 active members, have been awarded the PQM. The new standard comes into effect immediately.

azeevalkink@wilmington.co.uk

First published 27.06.2012