Consultation looks at increasing contributions for Pension Quality Mark

11 July 2017


The Pensions and Lifetime Savings Association (PLSA) is consulting on whether its top Pension Quality Mark is only given to employers that reach a total pension contribution with their employees of 18%.


The consultation is wide ranging consultation on the future standards for defined contribution (DC) pension provision in the UK. This will cover the Pension Quality Mark (PQM) for individual employer schemes and the Pension Quality Mark Ready (PQM Ready) for multi-employer schemes.


One of the questions asked in the consultation is:

Should PQM Plus be maintained, but at a higher required contribution level, with a commensurate increase in the contribution level required for the PQM, with the new levels set at a total contribution of 12% of pay for PQM and of 18% for PQM Plus?


PQM was launched in 2009 and is wholly owned by the Pensions and Lifetime Savings Association (PLSA). PQM is a standard that recognises high quality DC pension schemes. It is designed to raise confidence in workplace pensions, helping employers demonstrate that their scheme is good quality. PQM has been given to over 220 pension schemes, and covers 680,000 active scheme members.

There are two standards, PQM and PQM PLUS.  Under PQM, the scheme’s total contributions must equal at least 10% of an employee’s pensionable salary, with a minimum employer contribution of 6%.  Under PQM PLUS, the scheme’s total contributions must equal at least 15%, with a minimum employer contribution of 10%. PQM READY was launched in February 2013 and aims to help employers identify a good multi-employer pension scheme or master trust.


Since being launched, PQM and PQM Ready have become the highest accreditation available for the provision of individual and multi-employer DC pensions in the UK. However, since both were introduced there have been considerable developments in the DC market. As a result regulation and best practise now meet many of the PQM standards.


To continue this success the PQM board is proposing to review and enhance the standards required to achieve the PQM and PQM Ready accreditations. Areas covered by the consultation include:

  • Introducing ways to encourage employees to take up higher levels of employer matching contributions
  • Increasing minimum contribution levels
  • Removing age bands for pension provision
  • Reviewing fee cap levels
  • Extending the standards to assess schemes approaches to corporate stewardship and environmental, social and governance issues
  • Improving board performance through regular external assessment of trustee performance
  • Extending the PQM Ready standards to cover Group Personal Pensions (GPPs)


The new standards are set to be released prior to the end of 2017.

Interested parties are invited to respond before the consultation closes on 4 August 2017. 


PQM are holding a series of round tables and face to face meetings to further explore the areas covered in the consultation.  Information on these will be available via the website, Twitter and LinkedIn.