Corporate plan 2015 - 2018 published
Wednesday 25 March 2015
The Pensions Regulator published its latest corporate plan today, setting out how it intends to continue to improve standards in workplace pension schemes and enable good outcomes for retirement savers.
Go to The Pensions Regulator's corporate plan 2015 - 2018.
The plan outlines the regulator’s strategic approach to regulating defined benefit (DB) and defined contribution (DC) schemes, and to the further implementation of automatic enrolment (AE).
The plan sets out how it will work over the next three years to:
- Establish and run a regulatory regime for public service pension schemes.
- Embed the regulatory regime around the government’s DC pension reforms and flexibilities.
- Give guidance to over a million small and micro employers as they provide workplace pensions to their workers for the first time, and to those employers at the triennial anniversary following initial compliance with their employer duties so that they are equipped to deal with their ongoing duties.
- Disrupt the evolving pension scams models.
- Regulate defined benefit (DB) schemes. Recognising we operate in a challenging environment, we will work with employers and trustees in line with our DB strategy and code of practice.
- Engage with developing policy initiatives such as defined ambition and automatic transfers, and in Europe with the IORP Directive in our role as a member of EIOPA.
The regulator’s chair Mark Boyle said:
“The pensions landscape is going through the greatest period of change in generations. While these changes develop and come into force, people need to be confident that their pensions are being managed safely and fairly.
“It is vital that we reach all our audiences, remain on top of market developments, anticipate future risks and work collaboratively with government departments and industry bodies to ensure the overall retirement system runs smoothly.
“We will provide the pensions community with educational and guidance material but will also take tough action and provide effective deterrence against those who evade their obligations or circumvent the law.”
Chief executive Lesley Titcomb said:
“I have joined the organisation at an exciting time and there are many challenges to face over the next three years. While the whole landscape is undergoing a transformation in light of the DC flexibilities, we are also seeing a major shift from DB to DC membership, evolving scam models, and continued risks in the DB market. We also need to ensure 1.3 million small and micro employers meet their new employer duties.
“During a time of such significant change, it is important the regulator is seen as an authoritative, trusted voice within the pensions sector. The corporate plan sets out how we will provide trustees, employers and advisers with the information they need to see these major changes through. Where we take regulatory action I want that to be transparent and for our actions to be understood.
“We will work hard to meet the challenges ahead, ensuring people saving into occupational pension schemes enjoy high quality outcomes. We will improve our operational effectiveness, to remain a well-run and adaptable organisation ready to respond to the largest changes in the pensions landscape seen for a generation.”
The corporate plan includes an analysis of the current risks and issues in the pensions landscape, as well as the regulator’s business plan for 2015-16.
1. Key activities to be delivered by the regulator in the next three years include:
To promote good governance and administration of work-based pension schemes
- Revising our DC code and guidance in light of the Government’s new governance standards and charge controls, our experience of operating the current code and the evolving landscape.
- Working with DWP to help develop regulations on the transparency of charges in DC schemes.
- Continuing to support the master trust voluntary assurance framework.
- In respect of public service pension schemes, we will survey each scheme to enable us to assess their features and status – we will report on this and set out our expectations for compliance standards in due course.
To promote security and good outcomes for members of work-based pensions
- In response to the recent changes to legislation governing DC pension provision, providing guidance where necessary to protect the security of member benefits, rolling out our regulatory approach to charge controls, and monitoring the developing market for DB to DC transfers.
- Developing our DB risk identification systems and processes so that we focus on the riskiest schemes and segments. We will also engage proactively with a small number of DB schemes prior to their recovery plan submission date.
- For DB pension schemes our focus will be to mitigate the biggest risks to DB scheme members and reduce risks of DB schemes entering the PPF. We will do this through developing our risk identification systems and processes so that we focus on the riskiest schemes and segments.
- Identify pension scam cases where we expect our intervention to cause maximum disruption to the key orchestrators.
- Working with DWP to develop the emerging policy on automatic transfers.
- Working with EIOPA on the development of a stress test for DB and DC schemes.
To promote employer compliance with their pension responsibilities
- Continuing to focus on education and raising awareness among employers with fewer than 50 workers of their duties, using our enforcement powers where necessary to enable workers to get the pensions they are due.
- Working with the external adviser market to improve their knowledge and understanding of automatic enrolment.
- Developing strategies for a group of DB schemes which, due to the relative size of the scheme deficit when compared with the ability of the sponsoring employer to fund the scheme, may not be sustainable in the long term.
To improve our organisational efficiency and effectiveness
- Seeking to transform our business infrastructure and evolve our flexible and agile workforce.
- Identifying areas where digital engagement can add value and create efficiencies. Upgrading our IT infrastructure and developing the new capabilities required, resulting from the changes to the regulatory landscape.
2. The overall budget for 2015-16 is £76 million. The funding of regulation is derived from two main sources: a grant-in aid from the DWP which is recoverable from a levy on pension schemes relating to Pension Act 2004 duties, and a separate grant-in-aid from general taxation specifically relating to the automatic enrolment programme arising from Pension Act 2008 duties.
3. The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the employer’s plans for sustainable growth (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
Katherine Long 01273 811859
Matt Adams 01273 662086