The Pensions Regulator has set out plans to tackle the ‘unfinished business’ of the UK pensions system — saying it is looking to drive up standards across the trustee and advisory market.
In a blog, The Pensions Regulator (TPR) chief executive Nausicaa Delfas says the Pensions Schemes Bill promises to be the most significant moment for the industry since auto enrolment, and offers the missing pieces of the jigsaw puzzle when it comes to addressing issues of adequacy, value for money and better retirement solutions.
She adds: “With bold new legislation comes ever greater responsibility for trustees, advisers and administrators.
“The decisions [they] take have enormous impact on the financial wellbeing of millions of savers. And as the system grows and evolves, so must the nature of trusteeship. What worked in the past, may not work for the future.”
She says there was a need for the pension sector as a whole to “raise its game” to meet these new challenges. As a result Delfas says that TPR will be launching a new strategy to bring trusteeship into line with other professions and corporate governance standards.
Delfas adds that the central challenge for the industry is to ensure the system delivers value for money across the savings journey and through retirement. She adds that despite the widespread uptake of AE there remains concerns about savings adequacy.
“There very real risk is that millions of people who have defined contribution (DC) pensions will not have enough to support themselves in later life. And even if they do, without support, they risk losing much of their hard-saved money by taking the wrong decumulation option for them.”
She says new legislation offers some of the “pieces of the jigsaw” to tackle these issues, particularly in conjunction with the second stage of the Pension Review, which will look at wider savings adequacy issues.
Delfas adds: “It’s an important time for us at TPR, and for everyone involved in pensions… And it’s why TPR is transforming into a market-facing, prudential-style regulator, delivering meaningful initiatives that protect savers.”
Delfas concludes: “Everyone working in the pensions industry needs to be thinking now about their own role in making these reforms a success.
“The industry needs to adapt, evolve, rethink what it means to be a trustee, an administrator, an adviser. I am confident we will work together to complete the jigsaw and turn a vision of better outcomes for pension savers into a clear reality.”