It could be time for the industry to examine whether the Pensions Regulator is still needed in its current form, according to Robin Ellison, chairperson of the College of Lawmakers.
Ellison, who has called for the removal of TPR, said most regulators manage 15 years of operation before they are replaced or revised.
Speaking on a webinar organised by Pensions Playpen yesterday (August 29), Ellison's view was that The Pensions Regulator should be abolished.
He has been challenging the objectives, the cost base and the impact of TPR for some time and argued his view.
“TPR was established in 2005, as a response to the Maxwell scandal and other events, and has expanded from an initial establishment of about 20 people and a budget of £10mn to around 1,000 people and a budget of around £100mn and on a rule-of thumb measure, costing employers around £2bn a year in overheads,” he said.
“It is probably time to examine whether we still need it in its present form, whether it is still needed to protect members’ outcomes, and whether some of its activities are counter-productive.”
He explained that other regulators are adopting a ‘compassionate regulation’ regime, attempting to support regulated persons rather than punish them, and complying with government policies on reducing regulation.
“It is hard at present to measure whether TPR is value-for-money and whether it has been sufficiently professionalised,” he said.
“It shows signs of Pournelle’s Iron Law of Bureaucracy, ie, ‘that in any bureaucracy the people devoted to the benefit of the bureaucracy always get in control and those dedicated to the goals that the bureaucracy is supposed to accomplish have diminishing influence or are eliminated entirely’.”
Ellison argued that TPR could be repurposed to be more effective in providing safe havens to pension funds that need to modernise themselves, and have more effective control of pension scams, which are in reality the main threat to pension scheme members, “rather than lay trusteeship”.
This comes as it was recently revealed that staff working at TPR are striking for two weeks in a dispute over pay.
According to the Public and Commercial Services union, members working for TPR in Brighton will take strike action from September 5 to 18 after they were offered a 3 per cent pay rise.
It said staff have been offered only a 3 per cent pay increase despite the improved civil service pay remit of 4.5-5 per cent.
Ellison said: "TPR also needs to review whether there is regulatory creep, ie, adopting policies on ESG, DEI and consolidation which are second order issues, and not appropriate for regulators to be involved with.
“Finally trade bodies need to use their lobbying skills to participate in discussions with regulators not so much on detail as on purpose and tone.”
A spokesperson for TPR said: “Decisions about the regulatory framework remain a matter for the government.
“Our corporate plan, published in April, clearly shows how we continue to focus on protecting savers’ money, enhancing the pensions system and, as we look to the future, help to drive innovation in savers’ interests.
“We have a full and ambitious agenda for the benefit of millions of savers, designed to ensure value is at the heart of the pensions systems, and we are working hard to deliver it.”
sonia.rach@ft.com
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