Data is king as we deliver for the next generation of pension savers

Much has happened since I became Chief Executive of The Pensions Regulator (TPR) back in 2019, not least the inexorable march towards a new pensions reality in which savers bear far more risk and responsibility for their retirement choices.

That’s why I have made clear from the outset that TPR – working hand in hand with our partners – has a crucial role to play in ensuring those who run pensions help deliver the best possible outcomes for savers. I stand by that commitment.

We are putting savers at the centre of our thinking and examining everything we do through the saver’s lens, and I am confident that I leave TPR in great shape to meet the challenges ahead under new leadership.

But what does this mean in practice?

For me it was enormously important that, relatively early in my tenure, we launched our ambitious 15-year Corporate Strategy. This clearly sets out the priorities we will follow to put all pension savers at the heart of what we do. We are delivering against those priorities, as our 2023/24 Corporate Plan will show when published next month.

I am proud of how TPR responded to the profound operational challenges presented by COVID-19 to support the industry and employers. And I am pleased with the strong start we have made on implementing all the exciting elements of the Pension Schemes Act 2021 including:

  • helping to bring in more protections for savers through stricter controls on transfers
  • innovating through the authorisation of collective defined contribution (CDC) schemes and pensions dashboards
  • progressing our new defined benefit (DB) funding code

There is now a unanimity across the industry that pensions must offer value for money (VFM), and that low charges are just one part of the equation. This will be crucial for the many millions of people now saving into a defined contribution scheme, thanks to the ongoing success of automatic enrolment (AE).

We are working hard to engage with the industry, via round-table events and through communications, to ensure that the purpose and details of the proposed new value for money framework are well understood and of course to listen to the views of stakeholders.

This milestone programme, launched by the Minister for Pensions in January and run as a collaboration between Department for Work and Pensions (DWP), TPR and Financial Conduct Authority, should eventually allow savers to seek the best deal for them, providing transparency and fairness on their journey to the best possible retirement.

We are also designing a new value for members regulatory initiative for later this year which will challenge schemes that are not completing, or acting on, their value for members assessments. Ultimately, those running schemes who cannot deliver good outcomes for savers will be expected to consolidate.

Data: it’s more than just numbers

One of the fundamental building blocks of our corporate strategy is that we must become a data-led, digitally-enabled organisation. We must have the ability to collect data and use it as a regulatory tool to improve saver outcomes, in ways that we have not done in the past.

To support this transition, I have created a new Digital, Data and Technology directorate to help us deliver better services, regulate more effectively and have the scope to innovate to meet the challenges that will emerge in the future.

There are many examples of where data will be key. There are significant data requirements that sit within the DB Funding Code which we will need to process. In time, when the VFM framework starts collating data from schemes, we will need to scrutinise that to understand where improvements can be made.

Another example is understanding the data that shows how trustee boards are embracing diversity and inclusion, to show we are making progress in this area. And of course the data on how schemes are meeting their reporting duties around environmental, social and governance (ESG) and Taskforce on Climate-Related Financial Disclosures (TCFD) issues is fundamentally important.

So, data will clearly be vital to drive the improvements needed to protect savers. Gathering it is a challenge, but it’s one we are meeting, although there is a long way to go.

The road ahead

Change is ever-present in pensions, and that is how it should be.

So I was delighted to learn earlier this month that the DWP is backing a Private Member’s Bill to expand automatic enrolment, enabling millions of people to save more and to start saving earlier. The Bill proposes two extensions to AE – abolishing the lower earnings limit for contributions and reducing the age for being automatically enrolled to 18. I agree wholeheartedly with Jonathan Gullis MP, who is bringing the Bill, that it is a “no-brainer that we now need to extend auto-enrolment to those aged 18 and above”.

But while this is a welcome step, we know that the challenge of ensuring savers have an adequate retirement living is a very tough nut to crack. I applaud the work of the Pensions and Lifetime Savings Association in shining a light on this issue through its Retirement Living Standards measures.

We have a part to play, of course. Ensuring schemes are well run by fit and proper trustees, who are willing and able to deliver the highest standards of governance for their members, and signpost to the right advice, sits at the core of TPR’s purpose. To assist with this, we expect our new General Code of Practice to be launched later this spring.

And we have continued to relentlessly pursue the highest possible levels of employer compliance with AE, including holding gig economy employers to account where they simply refuse to recognise the pension rights of their staff. This has been a priority to me as CEO and I am confident employers are clearer than ever on our expectations.

Elsewhere, our work to tackle the scourge of pensions scams has made important strides through our pledge campaign and via high profile prosecutions – including the jailing of two scammers for more than 10 years.

We also worked closely with DWP to push for legislative change to empower trustees to refuse transfers where there’s a heightened risk it may be part of a scam. I am delighted that this was granted under the Pension Schemes Act 2021, which enshrined in legislation key due diligence measures and the issuing of saver warnings where a transfer may be high risk.

Our work with the industry to revitalise our collective response through the Pension Scams Action Group is also a good example of where our collaboration with other agencies is absolutely crucial.

And so on that note, I would like to thank all our stakeholders for their support over my four years as CEO in helping to break down the barriers that stand in the way of a fairer, more efficient pension saving landscape.

I also want to thank wholeheartedly the dedicated and passionate team at The Pensions Regulator. It is because they care that they can make the difference that they have over recent years.

I am sure that under the leadership of Nausicaa Delfas, TPR will continue to embrace innovation and act as a bold and effective regulator to tackle emerging risks and ensure savers remain at the heart of what we do. In the end we all are focused on helping each saver to have a good standard of living when they reach their retirement.

Charles Counsell

By Charles Counsell
Chief Executive