The Pensions Regulator’s chief executive, Nausicaa Delfas has urged the industry to improve investment strategies, enhance transparency, and collaborate on reforms to maximise saver outcomes and economic growth.
In a speech to the British Private Equity and Venture Capital Association Delfas called for “sophisticated investment governance”, greater transparency on performance and costs, a focus on value over low costs, enhanced risk management, and broader access to private market investments, while urging industry engagement with upcoming pension reforms.
Delfas stressed the importance of sophisticated investment governance systems and diversified portfolios for mitigating shocks and delivering long-term returns. She also pushed for more transparency in the industry’s performance and expenses, emphasising that schemes must understand the value and services they obtain for the amount spent.
She said: “I want every saver to be in a scheme with sophisticated investment governance practices – overseen by trustees that know what their long-term goals are. And for those trustees to really know that the goals they have set, meet the needs of their members.”
“There must be greater transparency in industry around performance and costs. Otherwise, how can trustees ever understand if they are making decisions which will meet their objectives for savers?”
Delfas also emphasised the importance of shifting the focus from low costs to value for money, arguing that competition should be based on the entire value offered rather than just the lowest price. She said The Pensions Regulator is focussing more on investments, ensuring that trustees have sufficient risk management procedures in place and a clear understanding of their objectives.
She added: “We need to move the competitive pressure away from cost alone to value. It can’t be right that the only barometer of a successful scheme is offering the lowest price.”
“We want and expect different kinds of schemes to invest differently depending on the needs of their members… We won’t tell schemes how to invest, but instead, pose the right questions and make sure trustees and schemes have the controls, capability and scale to really deliver for savers.”
She acknowledged the role of productive finance, including private and venture capital, and urged that schemes can invest in these areas if beneficial for members. Delfas also urged industry experts to actively engage with the upcoming government pensions review and Pensions Bill to ensure the system works for everyone and delivers value throughout a saver’s career and retirement.
Delfas said: “We believe sound investment in diverse assets can not only improve outcomes for savers but could also generate growth for the UK economy… We want to enable all schemes to have the ability to
“This is a unique opportunity to make pensions work for everyone… We need you to engage. Not just with the review, but with each other… Let’s not waste this opportunity.”
Broadstone head of policy David Brooks says: “The Pension Regulator’s latest interview on pension investments continues the direction of travel towards increasing investment transparency to drive economic growth.
“It is pleasing to see TPR steer clear of mandating scheme investment strategy and it is clear that significant industry engagement and collaboration will be required to lay out a clear path forward that protects member outcomes”