The Pensions Regulator ("TPR") has announced that it will introduce a new supervisory regime from October 2018. Under the new approach, all pension schemes can expect a higher level of interaction with TPR, including defined contribution schemes which have until now received limited intervention.
TPR's report published on 17 September 2018 ("TPR future, making workplace pensions work") sets out the four key areas on which the new approach is based:
- Setting clear expectations;
- Identifying risk early;
- Driving compliance through supervision and enforcement; and
- Working with others.
Lesley Titcomb, chief executive of TPR, said: "Following a complete review of our entire approach to regulation, we are now implementing a radical shake-up of the way we regulate to embed our pledge to be clearer, quicker and tougher. Schemes across all sectors, whatever their size, can expect the volume and frequency of their interactions with us to increase so that potential risks to pension savers are identified early and put right before it becomes necessary for us to use the full force of our enforcement powers."
She added: "An important element to our new approach will be the use of a broader range of communication channels to drive behavioural change by promoting greater understanding of what schemes need to do in order to comply with the law and demonstrate high standards. This was a vital ingredient in the success of automatic enrolment among employers and we look forward to developing a closer relationship with schemes both large and small."
As part of this new proactive approach, TPR wants to monitor some of the largest and riskiest pension schemes by introducing one-to-one supervision for 25 of the UK's biggest defined benefit, defined contribution and public service pension schemes from October 2018. The approach will then be rolled out to more than 60 schemes over the course of 2019. Schemes will be selected for this dedicated supervision based on a range of criteria including size, risk and previous interactions with TPR.
In addition to this approach for the largest schemes, higher volume supervisory approaches are also to be piloted with around 50 defined benefit schemes from October 2018. This will involve TPR proactively contacting schemes through telephone calls, emails and letters. By engaging in this way, TPR hopes to influence behaviours across a broader range of schemes and has indicated an intention to be tough on those that wilfully ignore or avoid their responsibilities.
Read the full TPR report here.
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