In a recent blog, the Pensions Regulator (TPR) outlined its strategic priorities for 2025, which focus on early intervention, collaboration, targeted supervision, and active engagement with schemes, advisers, and administrators to prevent problems before they arise.
Some of the Regulator's priorities over the next 12 months are:
• Improving Data Standards: With the impending rollout of dashboards and the ongoing trend towards consolidation, the importance of high-quality data has never been more pressing – particularly as recent research reveals that data inaccuracies impact one in five dashboard connection queries. The Regulator's new data strategy focuses on supporting better data practices, improving data literacy across the sector, and reducing regulatory burdens.
• Innovation Hub Launch: A new platform will encourage collaboration on innovative pension models, enabling schemes to explore creative solutions and stay ahead of changing saver needs.
• Stronger Enforcement: TPR will intensify its approach to tackling pension-related crimes, particularly fraud.
• Value for Money Focus: TPR will be pushing for greater operational efficiency and informed decision-making that enhances member outcomes.
• Climate Risk Protection: Schemes will be guided to protect savers from climate-related risks, helping them align with net-zero initiatives and manage both risk and opportunity in a sustainable economy.
• Trusteeship Standards: Efforts will be made to improve governance across schemes, ensuring trustees are equipped with the knowledge and skills needed to act in members' best interests.
• Changes to Oversight: The Regulator has also outlined changes to how it will supervise the most strategically significant schemes.
In line with these priorities, TPR wasted little time in announcing its new approach to oversight of the DC master trusts market. Following a 12-month review, TPR will now group DC master trusts into four segments based on their risk profiles:
• Monoline master trusts: Large schemes that are typically high-risk and require greater scrutiny.
• Commercial master trusts: Schemes managed by for-profit providers, often offering more complex investment strategies.
• Non-commercial (industry-wide) master trusts and collective DC schemes.
• Single/connected employer DC schemes.
Each group will receive tailored engagement according to the risks they present. For instance, for monoline and commercial master trusts, TPR will assign a dedicated team of named individuals with expertise in financial analysis, business strategy, investment and governance. This "expert-to-expert, risk-focused supervision" streamline oversight and reduce the need for unnecessary reviews while ensuring that the most important risks are effectively addressed. The same level of expertise will also be made available to non-commercial and CDC schemes.
The changes to the oversight of DC master trusts, along with its other priorities for the year, are part of the Regulator's shift to a more "prudential" style of regulation, which focusses on addressing risks not just at the individual scheme level but also those affecting the wider financial ecosystem.
If you would like to discuss anything raised in this blog in more detail, please get in touch with a member of the pensions team or your usual Brodies contact.
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