The next decade’s challenge is ensuring savers get value from the system and are guided to the right retirement products for their specific needs.
This was the main takeaway from a Corporate Adviser Summit presentation by Nina Blackett, The Pension Regulator’s recently appointed executive director of strategy, policy, and analysis.
Her directorate focuses on using evidence and analysis to guide regulation, covering both defined benefit and defined contribution pensions while identifying emerging risks and working closely with government bodies like the DWP and Treasury.
She emphasised the success of automatic enrolment, with private pension participation rising from 42 per cent in 2012 to 86 per cent today. However, the next challenge is ensuring that savers receive value for their money and are guided to appropriate retirement products.
The new Value for Money framework, developed with the FCA, is intended to drive competition and transparency across investment returns, service quality, and costs.
TPR is also scrutinising small schemes for compliance, already issuing fines and encouraging wind-ups where necessary.
Blackett noted a trend towards fewer, larger schemes and the growing complexity of Master Trusts. She indicated plans to adjust TPR’s supervision of these trusts as consolidation continues, predicting that by the end of the decade, three-quarters of trust-based DC members could be in schemes exceeding £50 billion.
Blackett also stated that TPR has doubled its investment team to encourage expert discussions. They use data and disclosures to have more in-depth discussions with pension schemes, ensuring schemes understand their goals, risks, and opportunities while offering guidance and insights.
According to Blackett, TPR is enhancing pension schemes by promoting in-depth discussions on operations, focusing on effective systems over mere compliance. TPR’s new VfM framework aims to provide clear data to drive value for savers, while a digital strategy will reduce regulatory burdens and improve industry standards.
She also stressed the need for trustee boards to have the right expertise to meet diverse member interests.
Blackett said TPR will prioritise retirement products and communication strategies, urging industry collaboration to help savers make informed choices about their retirement options.
Blackett said: “We have a long way to go on this. Only 34 per cent of DC pension holders aged 45 and over say that they understand their accumulation options with numbers like that, how many might end up picking options that aren’t suitable for their personal circumstance?.
“So that’s why we’re encouraging industry to approach us early propositions developed around the Watsons so that we can find and plot a way forward together offering value to savers.”
