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Board Meeting Summary December 2019

A summary of The Pensions Regulator's (TPR) Board meeting in December 2019.

Apologies and welcomes

The Chairman welcomed all those attending. Apologies had been received from Kirstin Baker and the Determinations Panel Chair.

No declarations of interest were declared.

Matters arising

The Chairman updated members that the Non-Executive Director appointment process will continue after the general election.

The Chief Executive Officer (CEO) had attended a Non-Executive Committee meeting the previous day, where he had shared his reflections on his first eight months as CEO.

CEO’s report

The CEO highlighted the successful completion of several long-term projects, including the Department for Work and Pensions (DWP) led automatic enrolment (AE) programme, the master trust authorisation programme, and the TPR Future programme, all of which have been transformational to the pensions industry landscape and The Pensions Regulator's (TPR) approaches.

The CEO told members that Darren Ryder, Director of Automatic Enrolment, has handed in his notice, and noted TPR is grateful for his expertise over the past eight years.

The development of a planning steer for 2020-21 is underway and will build on the current corporate plan and regulatory strategy until the new corporate strategy is established.

The Executive Director of Finance and Corporate Services updated members on DWP’s Levy consultation.

Further discussion included, superfunds, clarification of the appeal process and procedures for whistleblowing and raising grievances, RemCom’s updated terms of reference, and the wider trustee and governance review.

Members were updated verbally on current cases.

Master trust after action review

The Review of the master trust (MT) authorisation programme had been requested by the Board. The Board were updated that the MT team had met their statutory deadline for authorisation. As a result of the programme TPR has a much better oversight of MT schemes, in which there are now 16 million members, who are all better protected now than prior to authorisation.

The Board noted and discussed ongoing risks to MT authorisation, and challenges and lessons learned for TPR from the programme. The Chairman acknowledged the success of the project and thanked all those involved.

Strategy update

The Executive Director of Strategy and Risk updated the Board on progress of the development of the new strategy, noting the draft strategy is due for Board approval in February, with a view to consult from March. The high-level structure of the strategy represents TPR’s goals and visions, and ExCo (Executive Committee) will discuss the detailed implementation of each element in December.

Further to Board discussion, the Chairman noted that Board was supportive of the strategy direction.

Standards of administration and regulatory grip on administrators

The Executive Director of Regulatory Policy, Analysis and Advice and the Policy Lead briefed Board members on the programme of work undertaken since May 2019. One of the key areas of focus identified through this work is a decision to seek to build one-to-one relationships with a small number of administrators. Members noted the need for assurance to be provided that trustees are focusing on the correct elements of administration, and discussed the mechanism by which this can best be achieved.

On behalf of the Board, the Chairman thanked the authors for the comprehensive report which it supported.

Future of trusteeship: next steps

Team members updated the Board on the next steps for the Future of Trusteeship programme. The 114 responses received from the consultation and three external stakeholder events provided quality engagement from a wide range of stakeholders. Next steps were subsequently determined and prioritised and have been tested and agreed across TPR.

The proposals include a redesign of trustee knowledge and understanding (TKU) requirements for trustees and plans for an industry working group, headed by TPR, to drive greater levels of diversity within the sector which in turn will help to drive better scheme governance.

TPR Future final report

The Executive Director of Strategy and Risk TPR Future (TPRF) Programme Manager introduced the report and explained that we are now 18 months into TPRF, the 36-month organisational transformation programme. The key deliverable is a new regulatory operating model that includes the introduction of a strategy function, supervision and a broad range of other capabilities. The programme has delivered 40% more than the planned outputs, and external feedback has been positive, although the true impact of many of the regulatory initiatives are yet to be felt. The transition team is in place to embed key deliverables and track benefits.

On behalf of the Board, the Chairman commended the report and the achievements it represents.

Defined benefit (DB) funding consultation

Board members were updated on the DB funding consultation and noted the European Court of Justice’s judgment of the Bauer case is expected on 19 December. Next steps and challenges were discussed, and members noted the importance of schemes and employers understanding that the code will guide TPR’s behaviours.

Members were told the process had elicited a high level of robust challenge and discussion which the team had welcomed.

ARAC annual report

Sarah Smart, Chair of the Audit and Risk Assurance Committee (ARAC), introduced the bi-annual ARAC review. She clarified that the Committee’s focus is on risk and updated members about TPR’s risk assurance work.

Members noted that there is a strong dialogue process between ARAC and ExCo, typified by transparency and openness.