Personal PensionOct 15 2015

Pensions Regulator boss says FAMR could ease trustee advice

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Pensions Regulator boss says FAMR could ease trustee advice

The Financial Advice Market Review could lead to changes helping trustees constrained by rules on giving formal advice to employees, according to The Pensions Regulator’s chief executive.

Speaking at the National Association of Pension Funds’ annual conference today (15 October), Lesley Titcomb said that trustees should get the required training and challenge their advisers.

However, in discussing mandatory qualifications for trustees, she admitted that this could be risky, adding that attracting the number of trustees needed is going to be challenging.

“Trustees should be challenging employers on financial projections and strength of covenant,” she added.

Ms Titcomb also told delegates that auto-enrolment is her number one priority, with the next few years of small businesses staging. “Some we will have to nudge, some we will have to kick and some we will have to fine,” she commented.

The big challenge for employers is choosing a suitable auto-enrolment scheme, she continued, expressing disappointment that the regulator’s assurance framework has not been more widely adopted.

Another issue addressed in her conversation with Financial Times journalist Josephine Cumbo this morning was TPR’s review of master trust regulation.

She described the fact so few master trusts had obtained assurance as “frankly disappointing”, expressing particular concern about the sustainability of some newer master trusts.

“The thing that concerns me is the sustainability issue and there is no financial requirement on master trusts, on solvency or minimum capital levels for example. If they do go out of business it could be quite messy.”

Ms Titcomb said this would be addressed as a matter of urgency and that TPR is in discussion with the government on the issue.

She said: “We need to look at master trusts and the regulatory regime that applies to them. They are filling a hugely important role in auto-enrolment, particularly as we get into the small and micro world.”

Addressing speculation over the possibility of a merger between TPR and the Financial Conduct Authority, Ms Titcomb “crashing together” the two regulators would not solve problems with two sets of law for trust and contract-based pension schemes.

peter.walker@ft.com