The Pensions Regulator (TPR) will take a “more assertive” approach to guide schemes towards compliance.
Speaking at the Pensions and Lifetime Savings Association (PLSA) annual conference in Manchester this week, Nausicaa Delfas chief executive officer of TPR, said that while historically the regulator was focused on guiding schemes and employers towards compliance, it will be “clearer” with its expectations now.
She said: “We will be more assertive testing our powers to ensure savers are protected.”
Delfas pointed out that in order to do this, TPR launched a regulatory initiative to make sure that schemes with assets under £100m are complying with its enhanced value for member assessments.
She said: “Our initial findings show that some are already deciding they’re not offering value for money and plan to wind up but some are failing to act in savers’ interest.”
She added that in the past, TPR would seek to educate these trustees but the focus will now shift to taking “regulatory action” to help drive consolidation.
“We will be testing the full suite of powers available to us to really change behaviours. We will be issuing details of the actions we’re taking as part of that initiative shortly,” she noted.
Delfas said that in terms of influencing for better saver outcomes in the pensions landscape as a regulator, it needs to go “beyond basic compliance” and influence the market for greater and sager outcomes.
She continued: “We have bolstered our investment specialism, hiring respected experts from industry and we will soon launch a new digital and data strategy outlining our future transformation across all scheme types.”
She highlighted that the regulator will require schemes to not only disclose more information about themselves but to also “analyse, interpret and act to spot and mitigating risks before they materialise”.
“We all need to work together to harness the powers of data and digital [transformation] so we can act quickly and spot potential risk and threats across the whole system and react accordingly. We will need lots of information from you to enable us to do this,” she added.
Delfas said that the Value for Money framework was essential to access standardised objective data on scheme performance, adding that a “laser-like” focus on value would evolve “our regulatory and supervisory approach”.
The DB Funding Code would also be essential, she continued, noting that it would provide schemes with “continued flexibility” around funding to suit their circumstances while requiring trustees to think carefully about risk management in complex economic environment.
She said that “contrary” to some perceptions, the framework allows all schemes to invest in growth assets with “much greater” flexibility to open schemes and those further away from their endgame.
“The code, which we acknowledge has taken longer than anticipated due to the parliamentary process, not only sets out our expectations clearly to the market but also changes the game in terms of the volume and type of data that we as regulator can analyse to ensure savers interests are protected.”
Delfas said that both the General Code and DB Funding Code need to follow the parliamentary timetable but TPR hopes both will be published “soon”.
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