The Pensions Regulator’s (TPR) has published its new corporate plan which includes actions such as maintaining the battle against pension frauds, monitoring value for money for savers, and assisting schemes in becoming “dashboard ready.”
TPR will continue to call on schemes to sign its pledge to combat pension scams over the next two years, work closely with the Department of Work and Pensions (DWP) and the Financial Conduct Authority (FCA) on a future value-for-money framework consultation, and assess how smaller defined contribution schemes offer value for money.
TPR will begin an education programme in collaboration with partners on the Pensions Dashboards Programme, emphasising the measures schemes must take to meet their dashboard obligations, including what data to produce.
This builds on TPR’s three-year plan from last year, which detailed the company’s priorities for the years 2021 to 2024. It implements TPR’s business strategy, which was also released last year, by improving and safeguarding savers’ pensions through five key priorities.
TPR says its organisational capability will be enhanced through the introduction of a digital, data, and technology directorate. TPR’s ability to regulate effectively and efficiently will be enhanced by being data-driven and digitally empowered.
TPR says it intends to begin its second consultation on a new defined benefit funding code in the fall, with the code going into effect in September 2023. Only schemes with valuation effective dates on or after the new code’s commencement date will be affected, as the changes will be forward-looking.
TPR chief executive Charles Counsell says: “Our latest Corporate Plan shows we are well placed to protect savers as the pensions landscape continues to evolve. We can’t predict how the challenges of COVID-19, the conflict in Ukraine, the cost of living and climate change will play out in the long term, but it is vital that we and industry are prepared for heightened volatility.
“In these challenging times, we are committed to helping employers comply with their pension duties and to protect the security of their workplace schemes, and are ready to act if they don’t. We continue to support trustees in the effective running of schemes in savers’ best interests.
“TPR will continue to welcome innovation; we will work with our partners to meet the ambitious pensions dashboards legislative timetable, and will embrace new scheme models while overseeing the regulation of superfunds and collective defined contribution (CDC) schemes. We will be assessing CDC schemes for authorisation from August.”
TPR chair Sarah Smart says: “We want to see diverse and inclusive trustee boards making decisions that consider and represent all members. We will publish an action plan setting out how we plan to support the development of more diverse and inclusive boards of trustees and managers.
“We will also be working with government and industry to improve equalities in saving. To this end we support the 2017 Automatic Enrolment Review proposals which aim to open workplace pension saving to more people.”
Hymans Robertson partner Laura McLaren says: “TPR’s announcement today that it will launch its second consultation on the Funding code in the Autumn and clarity that changes won’t apply to valuations before 30 September 2023 is helpful.
“Despite this, however, pension schemes which are due valuations before then will have the challenge of navigating some ongoing regulatory uncertainty. This may run the risk of stifling decisive action from trustees and sponsors in the meantime but we’d hope that most schemes already looking ahead to the changes.
“Although trustees and sponsors are waiting for the long-awaited final detail to emerge later this year, tomorrow’s new laws are today’s best practice. It makes very little sense to agree a funding framework in 2022 or 2023 without understanding how it’s likely to work with the new code in 2025 / 2026.
“Indeed, whether driven by the new funding code or the maturing of DB schemes, a focus on the long-term funding and investment strategy has never been more important. We’re seeing many trustee boards already planning ahead for the requirement to formalise a long-term objective and looking to align that with a preferred endgame destination. With improved funding and insurer pricing, combined with the maturing of liabilities, schemes are finding they may be closer to endgame than expected. It’s important to start planning for that now.”