Industry wants to see adequacy and collaboration in TPR strategy
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Industry professionals have called for additions to the Pensions Regulator’s five-year corporate strategy as a consultation closes on Monday.
Last month, the regulator published its strategy saying it plans to focus on six outcomes:
- savings are secure: workplace pension members’ benefits are secure and delivered as promised.
- better value: workplace pension members benefit from investments and services that deliver long-term value and support a sustainable income in retirement.
- pensions are fair: people have fair access and opportunity across the workplace pensions system.
- well-run schemes: effective scheme governance and administration by independent, forward-looking and highly skilled trustees and scheme managers.
- a sustainable and resilient market: a resilient, financially secure pensions system that supports UK growth and operates efficiently.
- a seamless and integrated system: an end-to-end journey – from joining a scheme to taking an income in retirement, with innovative products and services connected to how people live their lives.
The Investment and Saving Alliance has responded saying TPR should make adequacy more central to its strategy and called for closer collaboration between regulators and different government departments.
Head of policy, products and long-term savings Renny Biggins said: “While we welcome the TPR’s system-wide view to encourage sustainable outcomes, its strategy should be bolder in its ambition. The ultimate aim must be a pensions system which delivers adequate retirement outcomes for consumers, supported by robust defaults, increased opportunity for informed choice and flexibility.”
He said the next five years could reshape defined contribution pensions for a generation through consolidation and technology if regulators and government work in a joined up way.
As well as a greater focus on adequacy and collaboration, TISA wants TPR to address undersaving by supporting more targeted employer engagement, reduce inconsistency between trust-based and contract-based pension journeys and minimises regulatory churn and administrative cost.
The Association of Consulting Actuaries has said it broadly agrees with the priorities but would like to see some additions.
New chair Chintan Gandhi said: “Once the new flexibilities for DB surplus distribution set out in the Pension Schemes Act 2026 are in force, the issue of how surplus is used is one where TPR guidance will be key. This significant issue would warrant additional comment in the strategy, including emphasising the need for regulatory balance.”
This should include conflict management for professional trustees, he added. Professional trustees are typically hired by the employer.
“These potential conflicts will become even more important to manage when the surplus flexibilities are in force,” said Gandhi.
In addition to talking about DB surplus sharing, Gandhi, who heads up collective defined contribution at Aon, recommended that the regulator should mention and actively support innovation on CDC.
