Nausicaa writes: “Savers rely on the pension system working as hard as it can to deliver the best possible retirement income. We believe this is best achieved by having fewer, larger, well-run schemes.
“We support innovation in savers’ interests and believe widening the opportunities for collective defined contribution (CDC) schemes and the introduction of a statutory regime for defined benefit (DB) superfunds can help bring about schemes with better governance and scale to achieve good outcomes.
“But in addition to new models, there needs to be a fundamental mindset shift throughout the pensions industry:
• Sophisticated investment governance practices.
• The scale to drive efficiency.
• And highly qualified trustees challenging advisers to make sure all savers get the best possible pensions.
“In DB this means ensuring delivery of the benefit commitment made to savers. In DC schemes, it means a move away from a focus on low costs to a laser-like focus on value.”
Looking forward, Nausicaa writes that TPR will soon update its DC guidance. And in the autumn, it will publish new guidance on investing in productive finance and update its existing investment guidance for DB and DC schemes. The new DB funding code will also clarify where DB schemes are able to accommodate investment in growth assets, particularly for open and immature schemes.
Concluding, Nausicaa writes: “As a regulator, we will be scrutinising and challenging trustees on the decisions they are making and how they are designed to deliver the right retirement outcomes for savers.
“Where trustees do not have the scale, expertise, or appetite to meet our challenge and truly deliver for savers – then it is time to consolidate and move their savers into a scheme that can.”
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