Background
1.2 ONS FDS pensions statistics team has worked extensively on the production of Funded Occupational Pension Schemes (FOPS) statistics, first released in January 2021. The source of data for these statistics is the newly developed Financial Survey of Pension Schemes (FSPS) which replaced the MQ5 Pension Funds Survey (PFS) which ceased in March 2019. The purpose of FSPS development was to move the MQ5 PFS survey online, future proof the questionnaire to ensure the latest International National Accounts standards were being met and to improve the quality of results produced.
1.3 The Financial Survey of Pension Schemes (FSPS) is a quarterly survey that collects data on income and expenditure, transactions, assets and liabilities of UK funded occupational pension schemes. FSPS groups funded occupational schemes into two types:
1.4 All occupational pension schemes for the private sector are included as are funded public-sector schemes such as the Local Government Pension Scheme. However, the survey does not cover all occupational pension schemes for public sector employees, such as unfunded schemes for civil servants, teachers and NHS staff and personal (contract-based) pensions provided by insurance companies.
1.5 ONS replaced the MQ5 Pension Funds Survey (PFS) with the FSPS from Quarter 2 (April to June) 2019. The survey is designed to monitor changes in pension schemes’ financial flows and balances. It is also designed to track changes over longer periods, for example the shifts in UK pension provision in the early 2000s from Defined Benefit (DB) to Defined Contribution (DC) pensions. In addition to the data collected previously in the PFS, the FSPS collects data on membership, which is vital for pension policy analysis.
1.6 Over a period of redevelopment between February 2018 and May 2019, ONS worked with pension experts to understand the data requirements of users and how it could meet these. These experts included:
- Department for Work and Pensions (DWP)
- The Pensions Regulator (TPR)
- Financial Conduct Authority (FCA)
- Debt Management Office (DMO)
- Pensions and Lifetime Savings Association
1.7 This redevelopment work allowed for the addition of more-detailed questions, which has enabled improved granularity of the statistics such as:
- separate estimates for funded public sector employee pension schemes and private sector employee pension schemes
- separate estimates for DBH pensions and DC pensions
- a “look-through” for large investment portfolios that are funded by several investors (pooled investment vehicles) so users can see the asset allocations of pension schemes investing through such vehicles
1.8 The survey is now more user-friendly, and the sample size has increased to cover all large occupational funded pension scheme providers as well as a representative sample of smaller schemes. Survey redevelopment included cognitive testing to minimise the possibility that survey respondents who input pension fund data misinterpret the questions. The pension statistics team worked closely with respondents to assist them in completing the new online survey. This has allowed ONS to build good relationships with respondents, improving the quality of returned data and increasing the response rate.
1.9 The team has worked closely with TPR to assure the quality of the frame that ONS uses to select its sample. The TPR publicationprovides a snapshot of the landscape of occupational DC trust-based pension provision in the UK, including information on the number of schemes, membership and total assets. However, the wider scope of the FSPS results in larger estimates than in the TPR publication and estimates in the TPR publication are not directly comparable to FSPS given the different treatment of “hybrid” arrangements (when members may receive both DB and DC benefits, or the scheme offers both types of benefit). TPR’s estimates also refer to schemes with 12 or more members. The Pensions Protection Fund Purple Book statistics published by the Pension Protection Fund are not directly comparable with FSPS DB estimates given the differing purpose and therefore methods for calculating balances. The Purple Book provides yearly data and analysis on the UK DB pension landscape which follows the same trends as Funded Occupational Pension Scheme (FOPS) statistics.
1.10 The focus of this review is on FOPS statistics and the FSPS. ONS also collects related pensions information from employers using the Annual Survey of Hours and Earnings (ASHE) and from households using the Wealth and Assets Survey (WAS).