Here at TPR, when we are regulating DB schemes, we have to pull off a complicated balancing act. Parliament has given us a mandate to protect pension savers and the PPF.
To do this, we have to make complex decisions to maintain the balance between a sponsoring employer and the funding needs of a scheme.
We recognise that in the past we may not always have got this balance right. So going forward, this is in an area where you can expect to see us being clearer, quicker and tougher. If we see the balance between the sponsoring employer and the pension scheme going adrift then in simple terms an alert will be triggered at TPR and we will intervene, including using our enforcement powers if necessary.
To achieve this, we have increased the numbers of people in our frontline regulatory teams, with more to come. We are using data and intelligence more effectively to identify schemes where we need to focus our resources and we are scanning the horizon for other emerging risks.
And shortly we’ll be introducing dedicated oversight on an ongoing basis for 75 of the highest risk schemes, which means that TPR will be in regular contact and monitoring developments at the scheme and in the sponsor as they happen, rather than just focusing on the three year valuation exercise.
We also welcome the latest White Paper proposals from the DWP to extend and strengthen our regulatory powers; these complement the changes we are already making to the way we regulate.
We think the package of changes proposed should increase the deterrent effect and help TPR to achieve a better balance between prevention and cure. They will strengthen our hand when dealing with those who don’t do the right thing.
We’ll have a flexible set of tools ranging from civil penalties to help drive compliance to criminal prosecutions for extreme avoidance cases, in addition to existing criminal powers where people fail to provide information to our investigations.
Whilst we’re clear that serious offences should be punished accordingly, we also believe that an effective regulatory framework should encourage co-operation and openness between TPR and our regulated community. We know that most trustees and employers want to comply with their obligations but that sometimes things go awry. This is where low level administrative fines for minor breaches have a role to play, in addition to our funding powers where appropriate.
The DWP is consulting now on a package of proposals relating to TPR’s powers which come out of the White Paper. I strongly encourage you to contribute your views – here’s the link through which you can do this.
Meanwhile, we are working closely with Government to ensure that these proposals will work successfully when implemented. Any new powers we are given need to be proportionate, reasonable and workable.
And our work to change the way we do regulation is moving at pace, making us more responsive to changes in the pensions landscape and to the risks and challenges that arise as a result. This, combined with the enhanced powers proposed by the DWP and the additional resources available to us, will put us on the front foot, enable us to achieve the right balance between schemes and employers and help build confidence in pensions.
By Lesley Titcomb
Chief Executive Officer