In a paper out today (18 October) the regulators vowed to crack down on value for money in pensions, saying they would set and enforce clear standards and using a broader range of regulatory interventions to drive value for money.
They will also carry out a joint review of the consumer pensions journey and strengthen their work on improving consumer outcomes from DB transfers and preventing scams.
The regulators said value for money was complex to assess as it was about quality as well as price.
The lack of an industry-wide methodology for assessing value posed a further problem.
According to TPR trustees of smaller occupational schemes struggle particularly with
assessments of value and some may be in breach of their legal duties.
TPR and the FCA have previously focused strongly on value in legacy workplace schemes, where the position is now improving, they stated.
The FCA is currently reviewing non-workplace pensions and will examine value for money as part of this.
Overall, the regulators want to tackle the problems faced by individuals who do not have adequate retirement income or the income that they expect in retirement.
The paper stated: "Adopting a more integrated approach to regulation will be instrumental to achieving our joint objectives. This will represent a step change in our relationship and enable us to have a greater impact by working more closely together.
"It will involve jointly undertaking risk assessments of issues in the sector, improved policy coordination and more joined-up communications.
"We recognise that our joint strategy will need to continue to evolve, as the pensions environment changes and new sources of harm emerge. We will review the strategy and its linked action plan after three years, considering a wide range of quantitative data and our qualitative judgements."
TPR and the FCA will set out a series of priority issues which should be addressed by the industry over the next five to ten years in order to make fundamental changes in the sector.
Over that time, the strategy will provide income products that support pension savers and financial provision for later life, ensure that pensions are well funded and governed and provide individuals with tools to enable them to make informed decisions.
Lesley Titcomb, chief executive of TPR, said: "The joint strategy further strengthens our close working relationship with the FCA so that through our new approach we can together address earlier any issues that threaten the retirement outcomes for pension savers.
"Our goal is to ensure the people who run workplace pensions meet our expectations so that members can have confidence their savings are protected. We are being clearer, quicker and tougher in the pursuit of this goal and working collaboratively with the FCA is vital."
Earlier this year (14 August) the TPR and FCA joined forces to deliver the ScamSmart campaign to target pension holders aged 45-65 who are most at risk of being scammed out of their pension.
The ScamSmart campaign aimed to encourage anyone who believes that they may have been targeted by fraudsters to report to the experience, with the two watchdogs believing that the majority of pension scams go unreported.
The joint strategy launched today will also focus on multi-agency collaboration to combat pension scams.
Christopher Woolard, executive director of strategy and competition at the FCA said: "We have worked closely with TPR to produce a co-ordinated and cohesive strategy that will produce positive results for people in or approaching retirement. .
"But success in delivering this strategy doesn’t just depend on action by us. With the support and collaboration of the government, industry and consumers themselves, we can deliver an environment which contributes to people having higher incomes in their retirement."
rosie.quigley@ft.com
