The Pensions Regulator’s year two corporate plan update to its 2024-27 plan emphasises the need for schemes to be well run, “with the capabilities of those running schemes improving over time”, leading to better governance and administration. 

The regulator’s outgoing chair Sarah Smart said the pension schemes bill currently in parliament is only part of the solution when it comes to making the pensions system work for everyone. 

While TPR will provide input to the adequacy review expected shortly, its corporate priorities are:

 

Smart said with auto-enrolment turning millions into savers, the focus is now on making sure those savings deliver value in retirement.

She added: “The market is changing, along with the expectations of trustees. Schemes must be well governed, powered by high-quality data, and open to innovation. Those that can’t deliver should consider consolidation, in the interests of savers.”

In the corporate plan, she reiterated TPR’s intention to bring trusteeship in line with other professions and corporate governance standards, and said: “Our priority is to raise standards of trusteeship through a new strategy and to focus on improving investment governance practices so that all savers benefit from diversified investments.” 

Chief executive Nausicaa Delfas said the pension schemes bill will reshape the market by driving consolidation into megafunds. 

“Building on this, real progress depends on industry-wide collaboration to ensure people get the retirement they deserve. That is why we will be focusing on raising standards of trusteeship and investment governance, driving value for money in pensions schemes, and creating default retirement solutions for pensions savers.” 

This year and next, the regulator will develop a new strategy for trusteeship, which will help inform its compliance and oversight approach to the market, it said. 

Among others, TPR plans to expand its market oversight to the largest professional trustee firms covering over £1tn worth of assets and to further strengthen engagement with eight of the largest commercial and non-commercial pensions administrators. 

Working with the Department for Work and Pensions, TPR also noted that it will expand its supervisory approach “to include public sector/public service schemes”. 

 

In addition, it will support the Ministry of Housing, Communities, and Local Government as it evolves the regulatory framework for Local Government Pension Schemes, expanding its engagement with scheme managers as the new expectations come into force.

Elsewhere, TPR will be required to support upcoming pensions policy changes. It will produce a code for multi-employer collective DC where needed and support the DWP with a legislative framework for the basis on which DB surplus can be accessed, as well as for superfunds.

To ensure compliance the regulator will create a new enforcement strategy: “We will continue to hold employers and trustees to account in the interests of savers, directing enforcement and regulatory tools where they are most needed. This will be supported by delivery of a new enforcement strategy, leading to the implementation and embedding of enhanced enforcement approaches.”