The Pensions Regulator (TPR) has put driving consolidation at centre of its new corporate plan for the next three years.

In a new corporate plan, TPR said it is working towards an industry with fewer schemes, all delivering good outcomes for savers.

It said the key challenges for 2024-25 will include embedding the new defined benefit (DB) funding code due to come into effect this summer, ensuring schemes deliver value for money, raising standards of trusteeship and driving trustees to prepare for pensions dashboards.

The regulator also noted that in years two and three of its three-year plan, it will focus on the delivery of a defined contribution (DC) value-for-money framework, tackling deferred small pots and working with industry to develop solutions to support savers into retirement.

On this journey, its priorities for the pensions industry over the next three years will include raising the standards of trusteeship and data quality – ensuring schemes meet their obligations to prepare for dashboards. TPR also wants to raise the standards of pension administration, expanding one-to-one relationships with key administrators to increase its ability to influence saver outcomes.

Additionally, for DC schemes it will focus on driving value – by evolving its supervisory approach in master trusts with a greater investment focus – and developing guidance on decumulation.

It will also ensure compliance with existing regulations around value, in particular the value for members assessment requirements that cover DC and hybrid schemes with assets of under £100m, and working on a new framework to address value across the pensions landscape.

For DB schemes it will provide guidance on capital-backed journey plans and expedite assessment of emerging-market propositions, supporting innovation in DB, as well as embed the DB funding code and new regulatory approach to DB funding.

Sarah Smart, TPR’s chair, said the pensions market is changing to one of fewer, larger, schemes.

“This presents new risks and opportunities for savers and the economy. This year’s plan demonstrates how we will address these challenges to protect savers, enhance the pension system and support innovation,” she said.

Smart added that the regulator will encourage innovation by helping trustees support DC savers into retirement and supporting DB models and options for consolidation that protect savers.

Nausicaa Delfas at TPR

Nausicaa Delfas at TPR

Nausicaa Delfas, chief executive officer of TPR, said the plan signals that the market should expect the regulator to engage differently with it in the future.

“Our focus is not just on the fundamentals of driving high levels of compliance, but also working together to enhance the system and support innovation in savers’ interests. Internally this will involve investing in our people, developing our digital, data and technology capabilities and embedding our new structure, which aligns with our strategic priorities,” she noted.

Nigel Peaple, director of policy and advocacy at the Pensions and Lifetime Savings Association (PLSA), said the strategy is “ambitious”, covering many of the priority policy areas for PLSA members, namely the DB journey, value for money, how to access pensions at and through retirement, small pots, trusteeship, scams and collective defined contribution funds.

Peaple added: “Some of the operational changes signalled will need care and be balanced against maintaining the usual functioning of the regulator, but with good progress already shown in TPR taking a more risk- and data-led approach, we are very supportive of the improvements these changes will bring to TPR’s supervision.” 

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