Today, I’m pleased to say we launch the strategy for our future, putting the saver at the heart of what we do, with a clear roadmap of how we will deliver effective change on the ground.
As a regulator, we are squarely focused on protecting savers’ pensions. That remains our key priority and will always be the bread and butter of a pensions regulator.
Our goal is clear: that all savers’ pensions deliver good outcomes and are protected now and in the future.
We understand it can be hard to predict the future.
We can look back on precedent, extrapolate trends, and draw insight from a range of credible resources to make a best guess – but it’s never a sure thing.
That doesn’t mean it’s not worth trying and when we set out to deliver our Corporate Strategy we wanted to make sure we are a regulator that is fit for the future. We wanted the strategy to look at how the world is changing, to analyse the market, identify priorities, and catch a glimpse of the shape of things to come, whatever that may be.
It will come as no surprise to say that we have already witnessed a fundamental shift in the pensions landscape over the past decade. Automatic enrolment brought about a pensions revolution with more than 10 million more new savers now putting away hard-earned cash to save for their retirement.
It changed the game, with defined contribution (DC) pensions becoming the mainstay for nearly all these new savers: a diverse group with people of all backgrounds and a range of incomes.
With this change, and more expected on the horizon, The Pensions Regulator (TPR) must change too.
That’s why, over the winter, we outlined proposals and sought views on how we should meet the challenges ahead. Many people across the industry gave their time generously to provide a robust check and challenge of our thinking. I am pleased to say there was broad agreement that our strategic view was sound.
Putting the saver at the heart of what we do
Our strategy sets out that defined benefit (DB) pension schemes and members will continue to be at the forefront of our minds, but that our resources will be focused across savers in both DB and DC schemes.
Through this we are determined to do all we can to ensure that savers, whoever they are and however they save, get the best possible retirement outcome from the pensions system.
We will meet this goal by delivering on our five strategic priorities:
- Security – savers’ money is secure
- Value for money – savers get good value for their money
- Scrutiny of decision-making – decisions made on behalf of savers are in their best interests
- Embracing innovation – the market innovates to meet savers’ needs
- Bold and effective regulation – TPR is a bold and effective regulator
These high-level priorities indicate our core areas of focus. Underpinning each of these areas will be regulatory action which looks to improve outcomes for savers. The detail behind our day-to-day work will be set out via three-year corporate plans but I want to give you a flavour, some examples, of what will change on the ground as we deliver on our strategy.
Under security we will continue to focus on DB outcomes and do all we can to stop scammers in their tracks by working with partners across Project Bloom to make sure action is co-ordinated and targeted where we can have the most impact.
On value for money, we will work with the FCA to bring about a consistent framework to assess not just costs and charges, but value for savers.
We will publish our first ever Climate Change Strategy to ensure that those that make decisions on behalf of savers do so in their best interests.
We will embrace innovation to support the development of new models of pension schemes including superfunds and collective defined contribution.
And all of this will be against the background of a bold and effective regulator equipped to drive participation, enhance retirement incomes and protect all savers pension pots. We will seek to work coherently with others, reduce friction in the system and take a principles-based approach to make workplace pensions work.
That being said, the COVID-19 pandemic has already accelerated many existing trends in the market and as we begin to emerge into the new world, I am sure, more change is to follow. That’s why we will continually test our understanding and predictions of the future market and adapt our approach and strategy to make sure our plans deliver for savers.
TPR exists to make workplace pensions work, and our statutory objectives give us the remit and foundations for this strategy.
The shift from DB to DC saving means that it is a natural evolution to go from a scheme and employer-centric approach to regulation, to one with savers at its heart. However, where pension savers’ outcomes are affected by issues beyond the scope of our current powers we will collaborate with others to make sure savers get the best possible support.
This last year has demonstrated more than most that change can happen quickly. Our new strategy shows that we are ready for it.
By Charles Counsell