The Pensions Regulator has announced that protecting the future financial wellbeing of savers will sit at the heart of its work for the next 15 years as it delivers on its statutory objectives.
Reflecting the changing nature of workplace pensions, TPR’s Corporate Strategy outlines a shift in focus, over time, from defined benefit (DB) to defined contribution (DC) saving. It also builds on TPR’s transformation to be a clear, quick and tough regulator.
Launching the strategy, Chief Executive Charles Counsell said that while support remains in place for pension schemes and employers in the wake of COVID-19, the future financial wellbeing of savers must underpin its long term and stretching ambition.
Counsell 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.
“We will do what is necessary to support the industry through the current crisis and to recover strongly so that savers can enjoy a secure retirement. We are standing up for savers of today and building a system that works for them into the future.”
The strategic priorities
The strategy analyses different groups of savers by generation – Baby Boomers, Generation X and Millennials – recognising that each group faces different life circumstances and risks in relation to their pensions.
For younger savers automatically enrolled into DC pensions, investment performance, value for money and at-retirement decision-making will play a much greater role in retirement outcomes.
From this analysis five strategic priorities emerge:
- Security – protecting the money that savers invest in pensions. Maintaining focus on the promises that are made to savers in defined benefit schemes and on protecting their pensions from scammers; over the fifteen-year horizon of the strategy, as assets in defined contribution schemes grow, there will be a shift in primary focus to the security and value that these schemes provide savers.
- Value for money – savers’ money must be well-invested, costs and charges must be reasonable; and good quality, efficient services and administration are driven by robust data.
- Scrutiny of decision making – monitoring those who make decisions that impact savers’ outcomes, closely scrutinising any decisions that pose a heightened risk to the quality of these outcomes.
- Embracing innovation – encourage innovation and good practice, collaborating with the market to enhance security, efficiency, transparency, simplicity, and choice.
- Bold and innovative regulation – transforming the way TPR regulates to put the saver at the heart of its work, driving participation in pensions saving and enhancing and protecting savers’ outcomes; maintain a sharp focus on bold and innovative regulation, anticipating and preventing issues before they materialise.
The strategy has been published today in the form of a discussion paper and meetings with key stakeholders are planned. The final strategy will be published in the new year when TPR will work closely with the industry to deliver on its priorities. The strategic priorities will form a core part of TPR’s annual three-year corporate planning going forward.