The Pensions Regulator (TPR) has seen its budget increase by £4.3m in 2018 to 2019, as it plans to crack down on sponsoring employers not taking their pension duties seriously while also launching a new anti-scams campaign.
In its corporate plan for 2018 to 2021, published today (10 May), the watchdog is estimating a budget of £88.7m for 2018 to 2019, an increase of 5.2 per cent when compared with the previous year.
According to The Pensions Regulator's chairman Mark Boyle, the pensions landscape has been changing significantly, and the regulator is meeting this challenge by embedding a new regulatory culture and reinforcing its regulatory teams on the frontline.
He said: "In the coming year, you can expect to see us being more vocal about our expectations of those we regulate and intervening quickly and decisively through our wide-ranging regulatory activity and enforcement powers so that workplace pension schemes are run properly and people can save safely for retirement."
During this period, the watchdog plans to increase its headcount by 12 per cent, to 660 people, as a result of its increased workload and remit.
The increase in salary costs will have an impact of £5.9m in the budget, while the forthcoming scams campaign will represent a cost of £1m.
Offsetting this budget increase is a reduction in contractual costs (£4.3m) mainly due to the completion of auto-enrolment roll-out to the large number of small and micro employers.
The regulator is funded through a grant-in-aid from the Department for Work & Pensions (DWP), which is recoverable from a scheme levy relating to Pensions Act 2004 duties, and a separate grant-in-aid from general taxation relating to the auto-enrolment programme arising from Pensions Act 2008 duties.
According to Lesley Titcomb, chief executive of The Pensions Regulator, the corporate plan sets out how it is "becoming a clearer, quicker and tougher regulator".
She said: "It highlights our wide regulatory remit including ensuring employers meet their workplace pension duties, authorising master trusts, securing funding for defined benefit schemes and a continued commitment to fighting scams."
Tom Selby, senior analyst at AJ Bell, argued that the watchdog "has come out fighting after something of an annus horribilis which has seen it face stinging criticism for its role in the BHS scandal and the recent failure of building firm Carillion".
He said: "While some of this may have been justified, The Pensions Regulator’s budget remains tiny when you consider the vast landscape it is required to monitor. This undoubtedly limits its ability to ensure all savers in the schemes it regulates are protected all of the time.
“With the UK’s smallest employers now part of the auto-enrolment landscape and further company failures inevitable as the UK high street continues to suffer, TPR’s job isn’t likely to get any easier.
“In this context, chairman Mark Boyle’s pledge to be ‘more vocal’ in communicating its expectations of those it regulates makes sense. The regulator has to compensate for its lack of resources somehow and by roaring like a lion it will hope to convince those it polices it is more than just a kitten.”