The Pensions Regulator is undergoing a period of transformation to ensure it remains “fit for the future” according to its chief executive Nausicaa Delfas.
In a keynote address at the JP Morgan Pensions and Savings Symposium, Delfas stressed that there had been “seismic shifts” in pension provision in the UK — forcing the regulator to adapt to ensure it continued to safeguard savers’ interests.
This would involve a larger and more significant role for the regulator in future she said, as it sought to oversee fewer but larger pensions schemes.
Delfas also highlighted the evolving roles of trustees in this new landscape.
Delfas pointed out that the old model, of myriad small schemes tied to individual employers is rapidly becoming obsolete, giving way to fewer larger schemes driven by regulatory and industry dynamics.
Delfas said that the industry had been changed by AE, which has seen 11 million savers newly enrolled in pension schemes and catalysed consolidation across the industry. She highlighted how master trusts have emerged as preferred vehicles for pension savings, with small employers enrolling workers en masse into schemes with robust governance standards.
She said this process of consolidation, affecting both defined benefit (DB) and defined contribution (DC) schemes, holds the potential to deliver superior outcomes for savers. She said that through its research the TPR has observed a correlation between scheme size and governance standards, underscoring the benefits of scale efficiencies and tighter regulatory oversight.
However, she also acknowledged the changing role of trustees in this landscape, requiring them to synthesise complex data and make strategic decisions in savers’ interests.
It was important, she said, that the higher levels of disclosure required should not be seen by trustees as a burden, but as an opportunity to drive genuine change in scheme operations, particularly in areas such as climate-related financial disclosures.
Delfas also outlined TPR’s strategic priorities, with a change to its internal structures to meet the challenges ahead. The regulator is restructuring to focus on what it sees as its three core functions: regulatory compliance, market oversight, and strategy, policy, and analysis.
Delfas says these internal structural changes will align resources with key objectives and enhance TPR’s effectiveness and ensure it is able to act quickly when it comes to enforcement to mitigate the potential threat to savers’ pension funds and the wider UK market.
Delfas also emphasised TPR’s commitment to leveraging data, digital, and technology to identify risks and develop agile regulatory approaches.