Pensions remain firmly in the spotlight – high profile funding cases, the impact of challenging economic conditions, the Work and Pensions Committee inquiry into defined benefit (DB) pension regulation.
For months now there has also been constant discussion about change – too much, not enough, not the right kind, too fast, not fast enough.
It’s understandable then that our role as the regulator is also being closely scrutinised, within government, in the press and at the numerous industry events we attend every week.
So it is right that we take a good look at how we can best help to address the issues facing the industry and the need now – more than ever – to ensure that pension savers receive the retirement outcomes they expect.
For our part, since I joined TPR I’ve been challenging our teams to look at how and when our powers can be used more innovatively, or what little-used powers might benefit members – such as issuing a modification order meaning that members of a scheme could benefit from PPF compensation.
And under our stewardship the roll out of automatic enrolment continues to be a success, with employer compliance over 90%, and upwards of 10 million people set to benefit from the new savings culture that this is creating.
That’s not to say that we don’t think there are areas where our powers can’t be strengthened. We have submitted evidence to the select committee inquiry and to DWP, our sponsor department, which sets out several areas of the regulatory framework that could be reviewed, including our clearance and information gathering powers.
The need for a strong, decisive and influential regulator is clear. I lead a committed and expert organisation made up of people who work every day to protect the interests of pension scheme members during tough economic times.
We are required by Parliament to maintain a balance in the way we regulate and we strive to do this. We have to protect members of DB schemes by ensuring schemes are adequately funded but also to minimise the impact on the sustainable growth of employers and reduce the risk of calls on the Pension Protection Fund.
As an organisation we have achieved a great deal, across all areas of pension regulation. Whether that’s improving governance standards across defined contribution (DC) and DB schemes through our guidance, equipping trustees and employers to navigate complex DB funding negotiations with our annual funding statement, or providing a clear and concise code of practice to help DC trustees comply with legislation and deliver the outcomes members deserve.
We have welcomed the proposal for a new Pensions Bill which will give us tough new supervisory powers to safeguard members of master trusts. This follows our long campaign for tighter regulation in this market, something we see as the lynchpin of the safe development of the future DC.
I am proud of these achievements, all made possible through the commitment and expertise of our staff.
To date, the flexibility of the DB framework we operate in has worked well but it was put in place 11 years ago and it is sensible now to take a fresh look at it. But that doesn’t just mean looking at our powers.
While already adapting to changes in the risks facing schemes and their members, we are looking at how our approach to regulation needs to evolve to meet future challenges and deliver effective regulation over the next 10 years or so. For example, we will look at the guidance we make available, the way we communicate, how we prioritise, select and conduct cases and whether we can collect and use data more effectively in targeting our regulatory interventions. And this needs to go right across all our regulatory activity – DB, DC, public sector schemes and automatic enrolment.
In the meantime we are committed to working as hard as we can to protect the benefits of those saving into workplace pensions within the existing framework of legislation.
By Lesley Titcomb
Chief Executive Officer