The retirement industry must act now to shape a future system which can deliver for members, according to Nausicaa Delfas, chief executive of The Pensions Regulator.
Speaking at the Eversheds Sutherland UK Pensions Conference, Delfas also argued that the market is changing rapidly. She pointed to the recently passed Pensions Scheme Act, from which she claimed the resulting scale of DC schemes will demand greater trustee skills, governance, administration and data.
Delfas also pointed out that the Pensions Commission is due to publish its interim report shortly on adequacy, fairness and sustainability, a document which could radically change conversation about contribution levels.
By 2036, she anticipates a markedly different workplace pensions market, with consolidation largely complete, mega-funds operating as long-term institutional investors, and the UK approaching £1 trillion in DC trust assets.
Defined benefit schemes will also be in managed run-off, building on the position set out in TPR’s Annual Funding Statement, which shows 80 per cent of schemes in surplus on a low dependency basis.
“Looking forward is not only interesting, it is essential if we are to act now to shape a system that truly delivers for members,” says Delfas. By 2036, she says accumulation and decumulation will be a single journey, with scheme-led retirement pathways balancing flexibility with predictability of income.
Delfas also highlighted AI as one of the most significant opportunities of the next decade, but stressed that trust is the system’s most valuable asset, and that AI must support human judgement, not replace it.