As part of its move to a more prudential style of regulation, allowing it to address risks at a systemic and scheme level, TPR has undertaken evidence gathering with 11 of the biggest trustee firms to better understand their businesses, the risks and opportunities that arise and any conflict issues.
TPR found a variety of business models in the market and a significant expansion in the number of professional trustees – all of which brought different risks and opportunities to savers.
As a result, it is now formally extending its oversight of PT firms seeking to influence better outcomes for savers. This builds on its experience establishing relationships with eight of the largest commercial and non-commercial administrators in the market.
Speaking to the TUC’s Pension Conference in London today, TPR’s Chief Executive, Nausicaa Delfas, said: “The professional trustee industry has experienced significant growth over the last few years, with more than half of UK schemes using a professional or sole trustee. Between them, just 10 firms govern more than a trillion pounds of savers’ retirement income. As part of our new risk-based and outcome-focused approach to regulation, we are extending our engagement with these firms to identify and mitigate any risks to pension savers.”
TPR today (Wednesday) published a market oversight report exploring some of the areas where risks to saver outcomes could arise including:
relationships with employers
profit and remuneration model
sole trusteeship
in-house advisers
scheme decision maker
And its Market Oversight team will establish ongoing supervisory relationships with PT firms starting from the summer and extending its approach to cover the remaining firms by the end of the year.
TPR added it wanted to hear views from industry and urged anyone with information or experience of the PT market and any risks to contact it.
Ms Delfas announced the new framework for professional trustee oversight in a speech at the Trades Union Congress pensions conference in London this afternoon (Wednesday 2 April).
LCP’s Sole Mates survey – published in September 2024 – found:
for the first time in its survey, which was first conducted in 2021, more than half of UK pension schemes have a professional or sole trustee, with a marked shift whereby almost half of appointments are sole trustees
professional trustee firms it surveyed have defined benefit pension scheme assets under management (AUM) of around £1.2 trillion
there has been a 30% increase in sole trustee appointments in the past year alone, with the survey indicating around £75 billion on AUM under sole trusteeship
The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are to:
protect members’ benefits
reduce the risk of calls on the Pension Protection Fund
promote, and improve understanding of, the good administration of work-based pension schemes
maximise employer compliance with automatic enrolment duties
minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only
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