Pensions Regulator  

FCA and Pensions Regulator plan joint strategy

FCA and Pensions Regulator plan joint strategy

The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are working together on a pensions regulatory strategy, which will be explained to the industry in the spring.

This plan, which aims to tackle the key risks facing the pensions sector in the next five to 10 years, is part of the regulators "ongoing efforts to ensure the sector works well for consumers and workplace pension savers," the FCA stated.

Both watchdogs will hold a series of events with stakeholders in London, Edinburgh and Manchester, which will focus on two areas: the regulators' collective view of the current landscape and their respective regulatory remits; and their likely key areas of focus in the coming years.

Article continues after advert

This work will also take into account the outcome of the Work & Pensions select committee's inquiry into pension freedoms, expected to be published soon, and the impact of the Department for Work & Pensions (DWP) review of auto-enrolment, announced in December.

The FCA stated that the last five years has seen significant change in the sector, such as the introduction of pension freedoms in 2015, and auto-enrolment, introduced in 2012.

For the market watchdog, this has meant making sure that its "regulation provides the appropriate level of consumer protection and competition within this new landscape, whether this is through the establishment of independent governance committees or ongoing work such as the retirement outcomes review," which a report is due on later this year.

For The Pensions Regulator, the focus has been on protecting workplace pension savers through a drive to improve standards of governance in schemes, ensuring schemes are being treated fairly by sponsoring employers, and that workers are enrolled into the pensions they are entitled to by employers as part of auto-enrolment.

According to Malcolm McLean, senior consultant at Barnet Waddingham, the regulators' joint plan "is very welcome."

He said: "There have been many significant changes in the pensions industry in recent years which have generally been handled well, but it may require a more coordinated and holistic approach from the FCA and The Pensions Regulator in the future.

"There are clear areas of overlap and duplication between the two bodies that can sometime create delays and a degree of confusion and uncertainty for stakeholders.

"It is important that, wherever possible, these sorts of problems are eliminated or at least minimised, going forward."

Mr McLean also argued there should be a debate on "whether at some point the regulatory process could be better addressed by having a single regulator".

He said: "There may be practical difficulties of scale, which preclude this happening but on the surface, a super regulator combining all the functions under one roof has much to commend it."