To reflect major changes in the political, economic and pensions landscape, TPR will be working proactively with more pension schemes through a new range of interventions to address risks sooner, clearly set out its expectations and take action where necessary.
The changes result from TPR’s major review of the way it does regulation, which is now transforming how the organisation works to safeguard member benefits. An update on the programme has been published.
Key to the new approach is the introduction of a supervision regime to monitor schemes more closely, which will include higher and lower intensity interventions depending on the risks identified.
Chief Executive Lesley Titcomb 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.
“Our new model is flexible – we will take a systematic approach to set out our expectations and will respond swiftly to emerging risks, taking tough action where necessary to tackle bad behaviour, including by corporate entities.
“An important element of 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 amongst employers and we look forward to developing a closer relationship with schemes, both large and small.”
Dedicated, one-to-one supervision will be introduced for 25 of the biggest defined contribution (DC), defined benefit (DB) and public service pension schemes from next month, with this approach being rolled out to more than 60 schemes over the next year.
TPR will maintain ongoing contact with these schemes and in some cases their sponsoring employers, reflecting their size and strategic importance within the pensions landscape.
In addition to one-to-one contact, higher volume supervisory approaches are also being introduced from next month to address risks and influence behaviours in a broader group of schemes.
This second type of intervention will be piloted with approximately 50 DB schemes to assess compliance with messages in TPR’s 2018 annual funding statement, specifically concerning whether schemes are being treated fairly when it comes to dividend payments to shareholders. Hundreds of schemes are expected to experience higher volume supervisory approaches over time to tackle different risks across the pensions landscape.
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