TPR extends its oversight to professional trustee firms

A framework for oversight of professional trustees (PTs) will be introduced by The Pensions Regulator (TPR) to protect savers.

The PT market has experienced substantial growth in recent years, with more than half of UK schemes using a professional or sole trustee model, according to industry research.

As part of its move to a more prudential style of regulation, allowing it to address risks at a systemic and scheme level, TPR has undertaken evidence gathering with 11 of the biggest trustee firms to better understand their businesses, the risks and opportunities that arise and any conflict issues.

The Regulator found a variety of business models in the market and a significant expansion in the number of PTs – all of which brought different risks and opportunities to savers.

As a result, it is now formally extending its oversight of PT firms seeking to influence better outcomes for savers. This builds on its experience establishing relationships with eight of the largest commercial and non-commercial administrators in the market.

Speaking to the TUC’s Pension Conference in London today, TPR’s Chief Executive Nausicaa Delfas will say: “The professional trustee industry has experienced significant growth over the last few years, with more than half of UK schemes using a professional or sole trustee.

“Between them, just 10 firms govern more than a trillion pounds of savers’ retirement income.

“As part of our new risk-based and outcome-focused approach to regulation, we are extending our engagement with these firms to identify and mitigate any risks to pension savers.”

TPR today (Wednesday) published a market oversight report exploring some of the areas where risks to saver outcomes could arise including:

• relationships with employers
• profit and remuneration model
• sole trusteeship
• in-house advisers
• scheme decision maker

And its Market Oversight team will establish ongoing supervisory with PT firms starting from the summer and extending its approach to cover the remaining firms by the end of the year.

TPR added it wanted to hear views from industry and urged anyone with information or experience of the PT market and any risks to contact it.