Pensions Regulator publishes a new corporate plan

On 3 May 2024, the Pensions Regulator (TPR) published a new corporate plan, outlining its strategic approach for the next three years. At the heart of the plan is protecting savers’ money, enhancing the pension system, and innovating in savers’ interests over the next three years. 

TPR’s Vision

A cornerstone of TPR’s vision for the future of the pensions industry is a transition to “fewer, larger pension schemes that deliver good outcomes for savers”. In our experience, this shift is reflective of the changing pensions market, which is moving towards consolidation and larger schemes.

TPR’s restructuring in February was also announced with this future landscape in mind – we discussed this restructuring in an article at the time.

Key challenges going forward

Within its plan, TPR acknolwedges that the industry faces the following challenges in the 2024/25 financial year:

• Embedding the new defined benefit (DB) funding code due to come into effect this autumn.
• Ensuring schemes deliver value for money.
• Raising standards of trusteeship.
• Driving trustees to prepare for pensions dashboards.

Looking ahead, TPR notes the following as challenges for the 2025/26 and 2026/27 financial years:

• The delivery of the defined contribution (DC) value for money framework.
• Tackling deferred small pots.
• Working with industry to develop solutions to support savers into retirement.

TPR tackling these challenges

With reference to the future landscape of the industry and challenges expected (both set out above), TPR sets the following “priorities for the next three years”. These relate to the industry in general, and then DC schemes and DB schemes, separately.

Across the industry

Namely, TPR will look to raise standards of:

• trusteeship, in order to protect savers. This will be achieved partly through “working closely with some of the largest professional trustee companies”, citing that such “firms increasingly [play] a significant role” in the industry; 
• data quality (with one eye on readiness for dashboards); and,
• pensions administration, which it hopes to achieve by “expanding one-to-one relationships with key administrators”. We have looked at TPR’s plans to achieve closer alignment with administrators in the context of cybersecurity in a previous article.

DC schemes

• Enhancing value for savers through a refined supervisory approach in master trusts with an increased focus on investment;
• Formulating decumulation guidance and promoting innovative models that merge flexible and predictable retirement income streams with supported saver pathways; and,
• Ensuring adherence to existing value regulations, especially for DC and hybrid schemes with assets under £100m. We recently published an article on this recent drive by TPR, too.

DB schemes

• Support innovation in the DB sector, by providing guidance on capital-backed journey plans and accelerating assessment of new market propositions.
• Integrating the DB funding code and new regulatory approach to DB funding. For more information on this, see our article from February.

Comment

It is clear that TPR is anticipating that the transition to fewer, but larger, pension schemes will continue – and is keen to facilitate this movement, noting the additional value for money for members that many tout such schemes as providing. 

With the TPR’s restructuring, drive for value for money in DC schemes, the recent DB funding updates, and now this updated corporate plan, it has certainly been a busy and productive time for the regulator. 

This article was written by Callum Duckmanton and Clive Pugh.

At the centre of TPR’s vision is a landscape of fewer, larger pension schemes that deliver good outcomes for savers.

https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2024-press-releases/driving-consolidation-and-better-saver-outcomes-tpr-corporate-plan