Delivering for workplace pension savers

Since I joined The Pensions Regulator as CEO in early April, we have been actively delivering on our commitments to protect workplace pensions for the benefit of millions of savers.

As our Corporate Plan sets out, we have a full and ambitious agenda. Taking account of the wider pensions ecosystem, we will focus on protecting savers’ money, enhancing the pensions system and, as we look to the future, helping to drive innovation in savers’ interests.

As the pensions landscape continues to shift from defined benefit to defined contribution schemes, so has the risk shifted from employers to savers. As a result, we too at TPR will be focusing on helping to deliver value for those savers.

Enhancing The Pension System Value For Money

We expect schemes to provide good value for money – those who cannot do so must improve or leave the market. We have launched a regulatory initiative (RI) to assess whether savers in defined contribution schemes are benefitting from new rules that require trustees to assess whether they are delivering value for their members. TPR expects to report on the progress of the RI, and any action it might take, in the autumn.

We are also continuing our work with the Department for Work and Pensions (DWP) and the Financial Conduct Authority (FCA) to develop a holistic value-for-money framework, to increase transparency and drive up standards and to not simply focus on cost.

Professional Trusteeship

We are pushing hard for everhigher standards of trusteeship and governance. Through our codes of practice and guidance, we are clear on our expectations for how schemes should be run and we believe there is a strong case for having a trustee who meets professional standards sitting on every pension board. We are looking at how we can develop a framework that would support this. We are also exploring what more we can do to support lay trustees and ensure they have the necessary skills and knowledge needed to carry out their role.

PROTECTING SAVERS’ MONEY DEFINED BENEFIT FUNDING CODE

Securing savers’ money is a key priority for TPR, and we are preparing the new DB Funding Code of Practice. Fundamentally, our aim is to ensure schemes align the level of risk they are taking with the level of support their employer can provide. This should be part of a journey plan to be in a low-risk position by the time they are significantly mature. Importantly, there is room for open schemes to reflect their specific circumstances, including allowing for future accrual.

We will finalise the Code over the coming months to reflect responses to our consultation and the final regulations from the DWP, which are necessary for the Code to come into effect. We expect the regulations and revised Code to come into force at the same time in April 2024 –until then, the existing Code and Guidance remain in place.

Fighting Scams

Protecting savers from scammers is vital to pensions security – and success relies on effective collaboration with partners in industry, government and law enforcement.

We believe that the industry has a vital part to play, and we will be stepping up our Pledge campaign, urging the industry to significantly increase its reporting of scams to Action Fraud, to provide us and our Pensions Scam Action Group partners with the intelligence we need to fight fraud and criminality.

DRIVING INNOVATION IN SAVERS’ INTERESTS

Embracing innovation to meet pension savers’ needs is a strategic priority for TPR.

In April we authorised the UK’s first CDC scheme – the Royal Mail Collective Pension Plan. We will continue to assess any CDC applications for authorisation, and are working closely with the DWP on plans to extend the CDC framework.

We will also be supporting schemes to prepare for connecting to pensions dashboards.

And looking ahead to the growing challenges of the future, we will work with our partners to deliver good outcomes for savers at decumulation. No doubt the rapid pace of change within the pensions ecosystem will continue and there will be ever greater need to support innovation in the interests of savers.

We look forward to ongoing engagement with the PLSA and other key stakeholders, as we all deliver on our priorities in the interests of workplace pension savers.