Skip to main content

Your browser is out of date, and unable to use many of the features of this website

Please upgrade your browser.

Ignore

This website requires cookies. Your browser currently has cookies disabled.

Corporate Plan 2020-21

The Pensions Regulator (TPR) Corporate Plan 2020-21 sets out our direction for the next year.

Published: 29 June 2020

Foreword

Welcome to TPR’s Corporate Plan, which sets out our direction over the next year, which we have revised in the midst of an ever-changing economic situation.

As with other organisations, we have had to radically rethink our plans for 2020-2021. In our pre- COVID-19 Corporate Plan we had intended to announce new regulatory initiatives, to explain how we would continue to extend our regulatory grip, to set out our plans for implementing important legislative change, and to trail the launch of our new Corporate Strategy.

As we neared the scheduled publication date, the UK was experiencing the mounting impact of the global COVID-19 crisis and then entered lockdown. As a result, we paused the launch of our plan and have now revised it to respond to the challenges this presents. It sets out our priorities and how we will continue to address the risks to the saver, as well as how we expect those we regulate to look after the scheme members’ valuable savings and to maintain financial resilience and confidence in pensions.

We are very proud of how the TPR team has responded and rapidly adjusted to having to work in a different way. We reacted quickly by reconfiguring our teams and directly communicating with the industry and our regulated community, liaising with schemes and administrators covering millions of memberships. We set up workstreams aimed at addressing the most pressing and urgent risks, publishing messages and guidance to the audiences who support our savers. We have been clear in our guidance to pension trustees, advisers, administrators and employers about the tasks we expect them to prioritise to protect savers. And we have been quick in getting these messages to the market to influence behaviour and address the immediate risks posed by the pandemic.

Stronger together – working with key government and regulatory partners

We have also been working even more closely with key partners including the Department for Work and Pensions (DWP), HM Treasury (HMT), the Pension Protection Fund (PPF), the Financial Conduct Authority (FCA) and Money and Pensions Service (MaPS). Our work with the FCA and MaPS is helping to protect savers from scams and prevent rushed decisions that could risk a lifetime of saving. The work we have undertaken with the DWP and HMT has resulted in coordinated guidance about the pensions element of the Coronavirus Job Retention Scheme and is also helping to progress the Pension Schemes Bill. We have been working closely with DWP and the PPF as we consider the further implications of COVID-19 on pensions.

In setting our revised priorities we have chosen to focus our efforts where they will have the most impact. These include work both over the short term – such as completing our COVID-19 response workstreams – and longer-term ambitions such as extending our supervision approach to protect more pension savers, introducing a new interim regime for defined benefit (DB) superfunds, continuing our work to improve the knowledge and understanding of Trustee Boards on environmental, social and governance (ESG) and climate change factors, and improving our oversight of the governance and disclosure of the risks that schemes face from climate change.

Clear, quick and tough in changing times

Ever since we transformed our regulatory model to be a clear, quick and tough regulator, we have challenged ourselves to make sure our expectations of trustees and employers are clear and more directive. The social and economic changes due to the COVID-19 pandemic mean that our regulated approach must be even more flexible, but we will continue to be clear and unambiguous about our expectations - and tough where appropriate, such as on fraudsters or wilfully non-compliant employers.

Our Annual Funding Statement, published at the end of April, demonstrated that we will balance flexibility with a firm regulatory grip. We have been clear that we know scheme valuations may be challenging and have urged trustees and employers to work together more closely than ever to ensure savers’ retirements are protected. We have always believed that the best support for a pension scheme is having a strong employer, and that our regulatory approach is flexible enough to balance the needs and challenges of both groups.

A continued focus on protecting savers

We will continue to protect pension savers by carrying out targeted regulatory interventions, improving standards of trusteeship and ensuring automatic enrolment continues to provide safe workplace pensions for savers.

In March we launched the first stage of a major consultation on our revised DB code of practice and have extended the deadline for responses until September as a result of the pandemic. In June we launched the interim supervisory regime for DB superfunds, outlining how we expect existing and emerging superfunds to meet clear and stringent standards to ensure savers’ retirement incomes are protected.

We continue to lead the Project Bloom multi-agency taskforce committed to tackling pension scams and will keep up the fight by working with partners such as the FCA and MaPS to provide savers with the information they need to recognise scams and to protect themselves.

Our new corporate strategy

We have been working hard over the last year to develop a Corporate Strategy which builds on the strong base of the TPR Future transformation and sets out a clear vision for what we want to achieve over the next 15 years. We were due to publish it for discussion with key stakeholders when the pandemic hit, and so decided to postpone its launch and to review the strategy to make sure it accurately reflects the new world in which we regulate. We will launch it at an appropriate time later this year.

A growing and evolving regulator

We remain a changing organisation that continues to grow in size and remit. Subject to the passage of the Pension Schemes Bill, the powers given to us by Parliament may also be extended. To improve our efficiency and effectiveness we are committing to investment in our infrastructure, and to using data more effectively through continuing with our major change programmes this year.

Our commitment

COVID-19 is an unprecedented challenge for us all, but it will not weaken our commitment to protecting savers and the PPF by making sure pension schemes and employers fulfil their obligations and meet our expectations. In the past 12 months, we have demonstrated our commitment to be clear, quick and tough. And now, more than ever, we intend to maintain this resolve.

We will continue to pursue our work with determination and, depending on how the current crisis unfolds, may publish a further update later this year on our plans and activities. We will be transparent on how we will measure our performance as we continue to protect and build confidence in workplace pensions, both as the current crisis continues and well into the future.

Charles Counsell's signature

Charles Counsell, Chief Executive

Mark Boyle

Mark Boyle, Chairman

Our statutory objectives

We are the public body that protects workplace pensions in the UK. We work with employers and those running pensions so that people can save safely for their retirement. Our statutory objectives are:

  1. to protect the benefits of members of occupational pension schemes
  2. to protect the benefits of members of personal pension schemes where direct payment arrangements are in place
  3. to promote and to improve understanding of the good administration of work-based pension schemes
  4. to reduce the risk of situations arising which may lead to compensation being payable from the PPF
  5. to maximise employer compliance and employer duties and the employment safeguards introduced by the Pensions Act 2008.
  6. in relation to DB scheme funding, to minimise any adverse impact on the sustainable growth of an employer

You can read more here about our approach to regulation and the values we hold that enable us to realise our vision of being a strong, agile, fair and efficient regulator.

Our outcomes

Our work as a regulator takes place in the context of broader public policy objectives for pensions, such as ensuring individuals save enough for a greater security in retirement.

The outcomes we strive for are:

  1. Participation: we want to increase participation in workplace pensions
  2. Protection: we want to protect members and the PPF
  3. Accountability: we want to hold those we regulate to account
  4. Confidence: we want to increase people’s confidence in the security and quality of workplace pensions

Our Corporate Plan is designed to influence these outcomes in fulfilling our statutory objectives. We explain how we will track developments in our evaluation section below.

Our priorities

The six priorities below reflect our current outlook for the year ahead, and our key activities and areas of focus within them. They are substantially the same as we were planning to announce but have been adapted to reflect the impact of the COVID-19 crisis.

1. Support workplace pensions schemes to deliver benefits through significant change driven by the global pandemic

The landscape that pensions schemes find themselves in has changed in a very short period of time, yet our priorities still need to meet our statutory objectives.

We are assessing the risks facing pension savers and those responsible for delivering their benefits and are responding through a series of workstreams, intervening where necessary to engage stakeholders, develop our policy and provide guidance.

We continue to warn savers about the risks of scams and to urge them not to make any hasty decisions about their pension because of COVID-19. We have outlined easements that trustees can apply in respect of deficit repair contributions and valuation submissions in the short term and have published guidance to employers on how they can continue to comply with their AE duties.

In the first three months of the year we adopted a more flexible approach to reporting through easements to requirements to focus trustees and administrators on the critical tasks of scheme governance and gathering intelligence on the risks to paying scheme benefits. From the beginning of July those easements will be removed.

Risks to pensions will continue to develop as the impact of the global pandemic over the medium and longer term becomes clearer. We will continue to look ahead and assess the risks and respond to them quickly. We will work with our strategic partners to take a longer-term view and respond accordingly to mitigate risks using the extent of our regulatory reach and the full range of our powers.

We will publish guidance, such as our regular bulletins and annual statements, but also standalone pieces in response to events and changes in the pensions landscape as they unfold.

Where appropriate we have taken into account the easements relating to COVID-19 in determining the areas of focus in our subsequent priorities.

Key Performance Indicator

We will complete our initial COVID-19 response workstreams, and undertake further interventions as necessary in response to the impact of the pandemic.

2. Protect pension savers across all scheme types through proactive and targeted regulatory interventions

Through the course of developing our regulatory approach last year we extended our reach further than ever before. We will continue to do this by consolidating the changes to our regulatory model, ensuring we are as effective as we can be and responding to risks as they develop.

We will continue to develop our one-to-one relationship supervision with the most significant schemes and we will build on this approach this year by increasing our engagement with pension scheme administrators whose actions affect millions of savers through the large number of schemes they manage. We will also continue to embed our supervision approach with all scheme types including master trusts, a market whose size and assets now represent a large proportion of pension savings and which will continue to grow over the longer term.

In the run-up to publishing this Corporate Plan we paused our regulatory initiatives to allow trustees and employers to respond to the impact of the pandemic. We will restart regulatory initiatives when appropriate to do so and launch new initiatives in areas where our risk focus has changed. Where appropriate, our intentions and ambitions will be revised in continued response to the global pandemic.

We will continue to work closely with our strategic partners, providing joined-up and effective regulation over cross-cutting areas such as environmental, social and governance (ESG) issues and pension scams.

Key Performance Indicator

We will extend our Supervision approach across more pension savers.

3. Provide clarity to, and promote the high standards of trusteeship, governance and administration we expect

Being clear about our expectations and promoting high standards of governance and administration will remain a priority for us. We will take forward a number of key initiatives this year and engage with our stakeholders at the appropriate time without overburdening them.

We plan to consult with our stakeholders on the implementation of a single code of practice towards the end of the year, which will bring together all our existing codes, making them easier to use and understand.

Our vision for the future of occupational pensions is one where all savers are in schemes that have excellent standards of governance that deliver good value. Over time we think this will mean having fewer, but better governed schemes in the market. Our research shows that small DC schemes in particular struggle to demonstrate the key indicators of good governance and administration. We will start to develop work in relation to our Future of Trusteeship consultation. A key theme will be the consolidation of poor or badly-run schemes, whose trustees cannot meet the standards we expect.

We will also start to update our code of practice on Trustee Knowledge and Understanding and will work with the pensions industry on improving Diversity and Inclusion on trustee boards.

ESG knowledge and understanding on trustee boards, and monitoring and improving the quality of scheme policies and actions will be a focus for us, as well as improving our oversight of the governance and disclosure of the risks that schemes face from climate change.

The Pensions Dashboards Programme remains an important development for the pensions industry in driving participation in pensions and adequate savings in retirement. We will be working closely with the industry working group led by MaPS, and our stakeholders, to fulfil our remit in this area and drive the required standards of administration.

We will be developing our communications with more specific targeting, making sure trustees take the actions they are directed to do and rectify any problems we uncover as a result. Being clear in the first instance about our expectations and the action we will take if they are not met will reduce the need for certain interventions and enforcement action. Where appropriate, however, our enforcement teams will continue to intervene to protect savers and improve governance using the full extent of our powers.

Key Performance Indicator

We will evolve and implement our administration strategy, taking into account the risks presented by COVID-19.

4. Intervene where appropriate so that DB schemes achieve their long-term funding strategy and deliver on pension promises

There is no doubt that COVID-19 is and will be testing employers and trustees like never before. It will be vital that they work together collaboratively through this challenging time and follow our guidance to balance the impacts on employers and schemes.

We have published our Annual Funding Statement for schemes carrying out valuations this year, and set out guidance on the flexibilities with the funding framework and when to apply them in the context of the COVID-19 crisis. We will review this guidance as circumstances progress and make further statements as necessary.

We will maintain our focus on the longer-term funding objectives of schemes and promote the Integrated Risk Management (IRM) framework. Contingency planning and developing funding strategies are as important today as they have ever been and will enable schemes to deliver benefits as they fall due.

We have extended the timeframe for the consultation on the principles of our new DB Code of practice in light of the pandemic. We will look to fully consult on the proposed draft and business impact assessment later this year, with a view to the new code coming into force later in 2021.

We will continue to use our supervisory relationships to promote appropriate scheme funding and to protect against the impact of calls upon the PPF. We will continue to respond assertively and appropriately to corporate events that affect pension schemes and balance the impact on the sustainability of sponsoring employers with the protection of scheme members, in line with our statutory objectives.

Our work to identify and establish appropriate frameworks and protections for new forms of pension provision such as DB superfunds will continue. We will work with the DWP, government and stakeholders to ensure these new models bring benefits for savers.

We will also work on the implementation of the new Pension Schemes Bill as and when it is enacted by Parliament. We will respond appropriately to any new powers given to us by Parliament as well as new regulations that are created from this primary legislation.

Key Performance Indicators

We will expand our DB rapid response and events engagements to include interventions associated with the impacts of COVID-19.

We will complete our first phase of consultation on principles for a revised DB code and begin the next phase of consultation, with a view to finalising the code later in 2021.

5. Ensure jobholders have an opportunity to save into a qualifying workplace pension through automatic enrolment

Automatic enrolment is now widely understood and accepted. In recognition of this we are looking at how we deliver AE regulation effectively and efficiently going forward.

Our focus this year will be to ensure that the integrity of the automatic enrolment regime continues, while supporting employers through difficult times from the impact of COVID-19, and where required providing appropriate easements. Maintaining the extremely high levels of compliance in the current climate will be a challenge, but we will remain vigilant and maintain our resolve for the longer term.

Compliance and enforcement activity will still form a major part of our regulatory activity, ensuring employers re-declare their commitments in line with their duties and that new employers with instant duties are compliant.

Our data-led approach will continue to improve as we focus on gathering more accurate information and use this to drive risk targeting and more effective forms of intervention.

Key Performance Indicators

Employers are continuing to re-declare and new employers are making their declarations for the first time in line with their duties for automatic enrolment.

Jobholders have been put into qualifying schemes.

Employers make accurate and timely contributions to their schemes on behalf of their workforce.

6. Continue to build a regulator capable of meeting the future challenges we face

We will be building our longer-term sustainable automatic enrolment model this year in the run up to transitioning over to a new way of working in 2021. In conjunction, we will stand down services from our primary supplier and ensure an integrated operating model at TPR provides efficient and effective services and regulation for the future.

We are also developing our IT systems to support regulation for our new ways of working. Alongside completing migration to Microsoft Azure cloud and considering our future accommodation strategy, these initiatives will form major programmes of work for us this year.

We will look to work with stakeholders to develop our longer-term Corporate Strategy at the appropriate point and start to develop the framework through which we can implement it through future Corporate Plans. We will also begin to realign our existing strategies in line with the developing Corporate Strategy, starting with the development of a new ‘People Strategy’.

Our people are what make TPR what it is today, and what it will be in the future. We will continue to transform our organisation through our Change Programme and support our people in their development and wellbeing, particularly during this period of lockdown and sustained remote working.

We will learn from these changes and build the benefits we find into our longer term working practices. Increasing our resilience, transparency and value for money through developing our governance processes, the ways we work and the tools we use will be vital to us regulating efficiently and effectively.

Key Performance Indicators

We have high employee engagement.

We have started transitioning to our new automatic enrolment delivery model.

We will begin implementing new IT systems to support our regulatory functions.

Evaluation

We will demonstrate our performance against our corporate priorities through these Key Performance Indicators, as well as our wider focus outlined in the corporate priorities section above at the end of our financial year within our Annual Report and Accounts. These KPIs have been reconfigured to reflect the easements and guidance that we have already communicated and other changes directly consequential from the COVID-19 crisis.

We will keep our plan and priorities under review as the impact of the pandemic develops. We may publish revised intentions later in the year accordingly.

In addition, we will continue to track the following Key Outcome Indicators (KOIs) that are aligned directly to the outcomes we seek:

Outcomes  Measure 
Participation
We want to increase participation in workplace pensions
Proportion of jobholder population that has been put into a qualifying scheme 
Proportion of employers that make contributions to schemes before they become significant late payments
Protection
We want to protect members and the PPF
Proportion of members in schemes that are demonstrating good governance
Aggregate funding ratio for DB schemes  
Accountability
We want to hold those we regulate to account
Average scheme record keeping scores 
Proportion of schemes that have been subject to a risk-targeted regulatory intervention
Confidence
We want to increase people’s confidence in the security and quality of workplace pension savings*
Proportion of members in pension schemes who are confident in pensions compared to other forms of saving

We will use these indicators, as well as other available sources of information to demonstrate how our work helps drive progress towards these outcomes over the longer term.

*Note: we have removed our voluntary contribution KOI this year due to ONS data no longer being made available.

Financial summary

Funding

Our funding is derived from two main sources: a grant-in-aid from the DWP which is recoverable from a scheme levy relating to Pensions Act 2004 duties, and a separate grant-in-aid from general taxation relating to the AE programme arising from Pensions Act 2008 duties.

The 2020-21 budget was agreed before COVID-19 and therefore the actual expenditure will be subject to change once we understand the implications arising from the impact on our plans. We will closely monitor our expenditure and manage the changes during the course of the year.

The funding requirement for 2020-21 is £6.4 million lower than that identified for the same year in last year’s Corporate Plan. The overall requirement includes work relating to our Systems to Support Regulatory Activity (SSRA) project. This is a major investment to replace our legacy IT systems and supporting infrastructure. We are also preparing for the end of the current outsourcing arrangement of the automatic enrolment regime and plan to bring most services back in-house. The budget also includes work in relation to the Pensions Bill and the Pensions Dashboards Programme for which TPR has been given a clear remit and work relating to emerging DB superfunds. An increase in the overall staffing levels to support the above work in addition to the ongoing regulatory activities is reflected in the plan.

2019-20 financial results

We spent £93.5 million in 2019-20 - which is £5.5 million below the original budget agreed with the DWP of £99 million. The main reasons for this are lower regulatory case costs, lower project expenditure, and reduced staff-related costs.

2020-21 budget and future years

The 2020-21 budget is an increase of £10.9 million against the full year spend forecast for 2019-20. The main reasons for this are an increase of £5.8 million in staff costs due to growth in payroll staff and an increase of £5.9 million in consultancy/professional services to reflect additional spend on our major projects.

We have not included future years forecast costs in this plan given the uncertainty we have in relation to COVID-19, but we will revisit the longer-term plan in detail during the course of the year. However, we do expect to see growth in our levy costs to reflect the growth in resourcing levels to match our growing regulatory remit and approaches, and our technology and data investment plans for the next three years.

The automatic enrolment costs will fluctuate over the next three years, with increases in expenditure to prepare for both the insourcing and procurement of services as the outsourcing contract ends in September 2021.

£000s 2019-20  2020-21 
Levy  £56,787 £64,841
Automatic enrolment £36,735 £39,543 
Total  £93,522 £104,384

We will continue to support and work with DWP in their review of the general levy.

Average payroll staff numbers

The 2019-20 and 2020-21 payroll FTE staff numbers are shown below. These 2020-21 figures are aligned to the budget figures and are subject to change due to COVID-19. We do expect to experience constraints around the growth of staff over the course of the year and we will prioritise and adjust our recruitment plans accordingly.

  2019-20  2020-21 
Levy 477 547 
Automatic enrolment 205  235 
Total 682  782