TPR announces new approach for pension regulations
The Pensions Regulator (TPR) has announced new plans for the regulation of pensions, which will see a "clearer, quicker and tougher" approach. The plans are aimed at increasing standards in the pension sector following criticisms levied at TRP after the collapse of businesses such as Carillion and BHS.
TPR's corporate plan for 2018-2021 has outlined their key areas of focus which include:
- Driving up standards of trusteeship and stewardship across all pension schemes
- Authorising master trust schemes
- Ensuring employers meet their automatic enrolment duties
- Ensuring defined benefit (DB) schemes are effectively regulated
- Working with government to implement the proposals set out in the white paper on the future of DB schemes
Mark Boyle, TPR Chairman, stated that: "The pensions landscape has been changing significantly. We are meeting this challenge by embedding a new regulatory culture and reinforcing our regulatory teams on the frontline". It is understood that TPR will become "more vocal" about their expectations of those who are regulated.
The plan confirms that "It is important that we keep pace with the evolving landscape, take into account the social, economic and political environment, and are able to adapt to changing risks".
This is evidenced by the increase in the standards expected of trusteeship and stewardship across all pension schemes and TPR confirmed that "some important work” in this regard will be implemented over the next three years.
It is also expected that TPR will increase the number of enforcement cases. The plan refers to an emphasis being placed on smaller defined benefit schemes and a target to investigate 80% of DB scheme valuations.
Master trusts also feature prominently in the corporate plan. There has been an exponential increase in such trusts in recent years, with membership increasing from 300,000 in 2012, to 10 million today. Authorisation of the first master trusts is due to begin in October 2018.
To assist with the increased regulation, significant increases in resources will be provided to protect pension savers and to aid "frontline regulation", with TPR staff numbers increasing by 22% over the next three years.
The plan was revealed in the same week as TPR's announcement that they will authorise High Court Enforcement Officers (HCEOs) to enforce court orders where employers fail to pay penalty notices. Going further to show TPR's determination to increase intervention, the HCEOs will have the power to seize assets of employers who fail to pay their fines.