TPR’s Corporate Strategy reflects a fundamental shift in pension saving in the UK but also focuses on the short-term challenge of protecting millions of savers as the country recovers from the COVID-19 pandemic.
TPR will immediately start to deliver on the strategy’s five priorities, including by stepping up the fight against scams with its partner agencies, a new climate change strategy to ensure schemes are investing in the best interests of members and by publishing a discussion paper to assess value for money for savers.
TPR Chief Executive Charles Counsell said: “Today we launch the strategy for our future, putting the saver at the heart of all that we do, with a clear roadmap of how we will deliver effective change on the ground to enhance and protect workplace pensions now and in the years to come.
“Millions of savers rely on pensions to replace income in later life. So as a regulator, we are squarely focused on protecting savers’ pensions in the short and long term. That remains our core aim. But we must also adapt to a rapidly changing pension landscape and plan for the future. As defined contribution saving becomes the norm for millions, we must strive for better security for savers, better value for money and a determination to embrace innovation so that savers can better understand their retirement outcomes.
“We will now begin putting our strategy into practice through our corporate planning process, clearly demonstrating that our new corporate priorities will underpin all the work we do.”
Reflecting the changing nature of workplace pensions, the strategy sets out how TPR will carefully balance its focus between DB and DC, with a focus on acting where it can make the most difference - and to the benefit of all savers. It also builds on TPR’s transformation to be a clear, quick and tough regulator.
The final version follows a series of round-table discussions with industry last year in which more than 40 key stakeholders took part, together with a consultation which led to several responses. TPR’s response to the discussion has also been published today.
A number of changes have been made as a result, including:
• A firmer recognition of savers’ keen interest in investment decisions consistent with their values, ESG and climate change, which will drive a greater demand for stewardship.
• A greater emphasis on protecting and enhancing outcomes for all kinds of savers, in addition to clearer recognition of the impact of protected characteristics such as disability, gender, age and ethnicity have on saver outcomes.
• A commitment to move quickly on value for money, starting with work with the FCA to assess what represents value for savers.
• New graphics and forecasts on how the shift towards DC saving will evolve, while recognising that funds within DB will remain substantial over the lifetime of the strategy, and the impact and reliance on the state pension.
The strategy, which will now form a core part of TPR’s annual three-year corporate planning going forward, analyses different groups of savers by generation - Baby Boomers, Generation X and Millennials.
It recognises that each group is likely to have a different level of reliance on different pension systems as well as facing different life circumstances and risks in relation to their pensions. For younger savers in particular (including Generation Z), automatically enrolled into DC pensions, factors such as investment performance and value for money will be key determinants of their pension outcomes over the next 15 years.
TPR Strategy: Pensions of the Future
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