RegulationOct 16 2020

TPR to focus on value in shift to DC

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TPR to focus on value in shift to DC

The Pensions Regulator plans to scrutinise whether savers’ pensions offer value for money, including whether the level of fees being charged are rational, in a new strategy unveiled this week.

As part of its 15-year corporate strategy, announced this morning (October 16), the regulator said it will look into whether savers’ pension pots are well-invested and the charges they accrue.

It also wants to ensure ‘robust data’ is driving the way schemes and trustees administer savers’ pensions.

The regulator said as defined contribution schemes grow and overtake defined benefit schemes, there will be a shift in focus to “the security and value that these schemes provide savers”.

Another priority for the regulator will be closer monitoring of those who make decisions that impact savers’ outcomes and scrutinising any decisions that may increase risk.

The regulator will also look at whether savers are being adequately protected from scammers.

Last week, TPR told the Work and Pensions Committee that it would like the power to allow trustees to delay transfers where scam activity is suspected.

The regulator said it wants to see increased innovation within the pensions market and better regulation so that it can anticipate and prevent issues before they arise.

Charles Counsell, chief executive of TPR, said: “In a rapidly evolving pensions world, it’s vital that as a regulator we anticipate the change that’s coming. 

“That’s why today we’ve outlined our 15-year vision for the future, putting savers at the heart of everything we do as we cement our clearer, quicker and tougher approach.

“We are determined to do all we can to protect pensions savings, drive participation and enhance outcomes now and in the future.”

He also said the regulator would continue to “do what is necessary” to support the industry through the coronavirus pandemic so it is able to “recover strongly” and ensure everyone can have a secure retirement.

TPR's strategy has been published in the form of a discussion paper and the final strategy is expected to be published in the new year.

Phil Brown, director of strategy at The People’s Pension, said: “We very much welcome the regulator’s new 15 year strategy – it’s a good plan and focuses on a new breed of retirement savers, the majority of whom have started saving since the dawn of auto-enrolment eight years ago. 

“In focusing on this shift from defined benefit to defined contribution pensions, it correctly identifies the main challenges for each generation and income group. Putting the focus on these savers is key.

“This strategy recognises TPR is now regulating a commercial market as well as employers and trustees, operating single employer schemes. This is very much a strategy for the immediate future of pensions.”

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