The Pensions Regulator (TPR) has published its latest Corporate Plan, setting out key actions the Regulator expects to take in relation to each of its five strategic priorities:
- Security – ensuring pension savers’ money is secure
- Value for Money – ensuring pension savers get good value for money
- Scrutiny of decision-making – ensuring decisions made on behalf of pension savers are in their best interests
- Embracing innovation – responding as the market innovates to meet pension savers’ needs
- Bold and effective regulation – being a bold and effective regulator.
What does all this mean for those involved with workplace pensions? Read on …
Security
TPR confirms that changes to the notifiable events regime (which were expected in April 2022) “will become operational in due course”. More generally, it will implement and embed its new and extended powers under the Pensions Schemes Act 2021.
On pension scams, TPR is concerned that savers are at heightened risk due to the pressures people are facing with personal finances. Its work will therefore continue to deliver communications that flag clear warnings for savers and schemes will continue to be encouraged to sign up to the Scams Pledge. The Regulator promises to publish a revised Pension Scams Strategy during 2022 and, at the time of writing, that promised has been delivered on.
TPR will continue to engage with key areas of the market in relation to cyber risk and discuss steps that can be taken to assess risk and develop resilience. Pilot activity to gather information will end in December 2022. So, look out for feedback!
Value for Money
TPR wants to drive a long-term focus on value for money across the pensions market. In 2022, the Regulator will assess how to identify and address instances of non-compliance and how it will engage with schemes that need to make improvements; schemes that have confirmed they offer good value for money; and schemes that will consolidate. This work will be taken forward into 2023 and 2024.
Scrutiny of decision-making
TPR confirms that it will publish its new single code of practice during the second half of this year and is planning to launch its second scheme funding consultation in Autumn 2022 (with the new code becoming operational from Autumn 2023). Changes resulting from the new code will be forward-looking, which means that schemes with valuation effective dates on or after the code’s commencement date will be affected. TPR may undertake a regulatory initiative (RI) ahead of the code becoming operational, potentially focusing on scheme management of risk and resulting covenant strength.
An update to the FCA-TPR joint regulatory strategy (issued in 2018) will be published in the second half of 2022 too, outlining the shared strategic outcomes that will continue to draw the regulators’ focus in the years ahead.
TPR recognises the need to improve equality, diversity, and inclusion (EDI) within their regulated community and along with its industry working group the Regulator is creating an action plan which will be implemented during the remaining period of its corporate plan. This is likely to include improving data on diversity and inclusivity; setting out TPR’s expectations of schemes, employers and trustees; and providing the tools, guidance, and support to meet and exceed those expectations.
Also under this heading, TPR will continue to implement the PSA 2021 requirements on climate change, including assessing TCFD reports for the largest schemes and master trusts. More generally, the Regulator will develop a regulatory initiative focused on the ESG / investment regulations and the publication by schemes of compliant statements of investment principles and implementation statements.
Embracing innovation
TPR will continue to work with the Pension Dashboard Programme, DWP and FCA as the legislative and technological frameworks are set. It will also launch a programme of education.
In relation to superfunds and other innovative DB models, TPR expects the de-risking market for DB schemes to continue to develop, a wider set of options and opportunities for trustees and employers to have emerged, and a number of schemes to have transacted with these. The Regulator will continue to engage with prospective providers, undertake research and analysis and assess risks. It will also complete a review of certain elements of its superfund guidance and produce any further guidance on the broader landscape of options as necessary.
With regard to other types of new pension scheme, TPR will support the development of new regulations to enable a broader market for CDC schemes to be established.
Bold and effective regulation
TPR continues to assess its operational effectiveness and find ways to improve it. TPR will explore several operational changes, such as preparing for a future office location from July 2023, upgrading day-to-day systems, and a major review of its Auto-Enrolment (AE) Operational Strategy. A Digital, Data and Technology directorate will be created to develop organisational capability.
As with other organisations, TPR recognises the need to reduce its environmental impact and improve its resilience to the impacts of climate change. By 2024, it will set out plans to achieve net-zero carbon emissions by 2030.
‘Other’
The Corporate Plan provides a useful update on key activity at TPR.
It also sets out how TPR will use key outcome indicators and key performance indicators to measure its performance against objectives over the five strategic priorities.
The plan incorporates a Financial Summary highlighting the agreed 2022-23 budget of £111.5m, a decrease of £0.4m against 2021-22. TPR is planning to increase staff numbers from 825 in 2021-22 (actual) to 886 in 2022-23 (budgeted).
