Time to act
Nausicaa Delfas gave a speech on day two of the Professional Pensions Trustee Senate 2026
Key points
- TPR’s vision is that people have a sustainable income in retirement, supported by a pensions system that provides security and value for all.
- There is a clear reform agenda ahead to achieve it.
- The time for trustees to act is now:
- In defined benefit (DB), to determine endgame
- In defined contribution (DC) to deliver value and default pensions
- Effective and independent governance is key, whether trustees decide to consolidate or to go it alone.
- This is a significant pensions reform agenda – we will support you through a risk based, outcomes focussed, and no-surprises regulatory approach.
It is a pleasure to be here today.
I have been having lots of discussions with counterparts from around the world, and it’s clear that we are all grappling with the same, complex, socio-economic issue – in a changing world, how do we support people financially in later life?
In UK pensions, automatic enrolment has given us a head start. But participation is not enough.
The Pension Schemes Act 2026, and TPR’s new strategy signal a new era.
Now is the time to make the decisions that will deliver good member outcomes for future generations. It is time to act.
We have a vision that everyone has a sustainable income in retirement.
And our new five-year strategy published in July, which is aligned with the clear regulatory reform roadmap, seeks to make the pensions system more secure, fair, and drive value.
Members need change to happen.
Because about 43% of working age people are heading for an insecure retirement.
It’s not too late. We can course correct.
As a regulator we want to see:
- fewer, larger, well-run schemes
- delivering security and value
- in a pensions system geared towards providing a sustainable income in retirement
As trustees, you are the stewards of this financial system.
Now is the time for you to act and take the decisions that will deliver that sustainable income in retirement for millions.
As I will set out today, for DB that means taking decisions now on endgame.
For DC it means deciding whether you are able to meet the complex but necessary new requirements under the Pension Schemes Act.
And for all trustees, it means asking yourself a tough question: with all that is required of me now, should I consolidate or do I have the capability to go it alone?
DB schemes
I will start with DB.
Private DB schemes have well over a trillion pounds of assets. Open schemes, and the public sector, will play an important role for members for decades to come.
But only 3% of private DB schemes are open to new members.
With a broad range of options for endgame – some in development, some already here – you need to decide now on your scheme’s long-term objective, in the interest of members.
Why now?
Today, DB schemes are better funded than at any point in recent memory.
80% are in surplus on a low dependency basis. With an estimated £170 billion of surplus assets.
And the best time to make a decision is not when circumstances force your hand, but when options are available.
The options
So you should consider the full range of choice on offer to secure outcomes in the long term.
That could be through consolidation options such as buyout and superfunds or setting a very clear strategy, if you decide to go it alone.
How do you decide?
The priority is to make sure that in any option, good member outcomes outweigh the risks. Not every option will be right for every scheme; each has benefits and trade-offs.
The complex choices that lie ahead underline why we have advocated so strongly for trustee boards to have the right skills and experience for the circumstance they face.
So what do we expect you to do now?
At a minimum:
- set a long-term objective
- assess all of the available options
- and challenge whether your current governance structure remains fit for purpose
For many trustees, that means making sure you fully understand the new options available.
For some, it will mean seeking training from advisers. And advisers will need to make sure they understand a wider range of options so that you have enough information to make well-informed decisions.
Whatever you decide, we expect trustees to be able to show how they made their choice.
That means documenting decisions and deliberations on covenant and security, funding levels, governance, costs, investment strategy and other relevant factors.
DB surplus
As well as agreeing a destination, many of you will now need to consider if and how surplus plays a role.
You should always start with the end in mind rather than letting surplus drive the outcome of decisions. So the first question should always be: ‘how do I best secure member benefits and good member outcomes?’
Last year we published our DB options and models guidance.
The surplus regulations are expected to come into force next April, and we will publish guidance for consultation on the factors trustees should consider when assessing DB surplus release.
This is a decision only you can make. But whatever your position on surplus, the time to decide on endgame is now.
DC schemes
Turning to DC.
92% of active DC memberships are in Master Trusts – they are the future for most people.
And the single-employer market is continuing to consolidate. Our 2025 DC landscape data shows a 15% fall in the number of non-micro DC and hybrid schemes year on year.
With the regulatory roadmap accelerating this trend in consolidation, we must ensure that scale is the enabler of the true goal the system is meant to provide – that people have enough money to provide for themselves in later life.
In a world where members don’t choose to save and do not make investment decisions, society and members need you as trustees to make good design decisions at every step of the way – from joining and investing in a pension scheme, right through to using that money in retirement.
I will turn to two of the key reforms that will help you to do this – value for money and guided retirement.
DC – value for money
You have fiduciary obligations. Delivering value for your members is an important way to fulfil those obligations.
The value for money framework will help turn minds towards holistic value rather than costs - investment performance and customer service for the price paid.
If the VFM framework leads to a 1% improvement in investment returns for the average member who started saving at 22, it could lead to a 30% bigger pot by retirement.
A huge prize for all of us to keep in mind.
We are working with the FCA and DWP to analyse consultation responses ahead of publishing final regulations early next year.
So my message to trustees is: start preparing now.
Getting your data in order is a priority.
The first deadlines will be next year. 2027 will be the first year for which data must be collected, and the deadline for submitting it will be the end of March 2028.
This is new for everyone. That is why all consequences will apply from the second assessment cycle, to make sure comparison is fair – in line with our proportionate regulatory approach.
You should review your investment strategy to ensure that it is forward looking and delivers appropriate member returns.
We all know that asset allocation and choice of investments is a key driver to the ratings that will be provided and the outcome members will receive. And that compounding investment returns can be responsible for around two‑thirds of the value of a DC pot.
We do not advocate for investment in one asset class over another. But we do expect all schemes to be able to consider all kinds of investments and that you as trustees build high performing, resilient portfolios.
UK investments and private market investments more broadly have a role to play, if they deliver good returns for members, at the right duration and risk profile.
At TPR we are committed to using our unique position in the sector to understand and address the barriers to greater investment in a diverse range of assets. That is why last month we published our report into schemes' appetite and expertise with private market investments. While there were many positive developments, there were still a number of hurdles holding schemes back.
They included concerns around timescale, market uncertainty, a lack of investible asset pipelines. a lack of consistency in private market investment disclosures and reporting, and limited access to venture capital.
Some of these are issues that the market itself could address.
In many cases though, we found scheme governance was a barrier. Many schemes did not have the sophisticated investment governance and risk management systems to capitalise on the opportunities available. That is something for you to think about in your scheme.
DC – default pensions
Turning now to default pensions, guided retirement requirements.
The focus so far has mostly been on accumulation.
But a sustainable income in retirement also depends on what happens at decumulation.
We know that in accumulation, that most members follow the path set for them, staying in default arrangements and only one in four people have a plan for how to access their funds – which means they risk choosing inappropriate options and losing value in their pots.
So, to ensure more people have a sustainable income when they retire we need to make sure the system offers well-structured defaults.
Guided retirement requires trustees to design default pensions based on the needs of their members. This means that you are responsible for designing the default pensions, your cohorts of members, and allocating the members to default pensions appropriately.
Our message to trustees here is: start preparing now.
You’ll need to think about your cohorts of members:
- ask the right questions about members’ needs and characteristics, and
- be explicit about what good looks like and how success will be measured
We know from international experience that there are a relatively limited number of options at retirement:
- annuities
- drawdown – guided or otherwise
- combination of the two above; and, soon to emerge in the UK,
- retirement CDC
What is important is that you choose what is right for your members.
We will be consulting jointly with DWP and FCA this autumn, developing a framework to help you, with secondary legislation and regulatory guidance.
CDC
I mentioned CDC. New regulations came into force at the end of July, alongside a new code allowing us to accept applications from providers wanting to offer their scheme to multiple unconnected employers.
At TPR we already have a pipeline of likely applications from prospective market participants. The first multi-employer CDC schemes could be accepting contributions from early 2027.
As published on our regulatory roadmap, we expect DWP to consult soon on regulations enabling retirement only CDC schemes to apply for authorisation.
We are keen to speak to potential providers of retirement CDC, and will continue to support innovation in this area.
So to sum up the key decisions for you.
Whether it is value for money, consideration of a broader range of investments or default retirement options, DC schemes have choices to make.
And now is the time to ask:
Can I compete on all of these elements and truly deliver on my fiduciary obligations?
Or do I consolidate?
We expect trustees of single employer schemes to take a clear-eyed view of whether consolidation is right for them.
And whether they can deliver a sustainable income in retirement compared to the open master trust market.
And just like DB, if single employer DC schemes decide to go it alone they should consider how their governance arrangements may need to change over the next five to ten years in terms of skills, investment governance, monitoring, and risk management arrangements, to address the requirements I have set out.
Trustees remain at the heart of ensuring that good member outcomes are delivered.
With skills and knowledge required for the future, built on the strong foundations of today. But I must be clear – the bar is rising quickly.
TPR's role in the market
Today I have laid out my expectations of you, trustees, and the complex choices and decisions ahead. I want to say a few words about what you can expect from us in terms of our regulatory approach and support.
Our role is to help the market to work well – to protect, enhance, innovate in the interests’ of members.
We are committed to helping you plan ahead – with clear deadlines and expectations for action.
That is why we published our regulatory roadmap in July setting out when we plan to consult and produce guidance in support of the reform agenda.
We are committed to being open about what we think and why, and keen for early engagement on new ideas or where issues are emerging.
Where you spot burden which doesn’t prevent harm – tell us, we’re listening. We also encourage those with new ideas to engage with us early via our innovation service.
And we are committed to being proportionate in our approach – as our new enforcement approach says, no surprises in our risk tolerances and early engagement, but also faster intervention where member outcomes are at risk.
Conclusion
So, to conclude, the time to act is now – to understand whether you are consolidating or going it alone.
Let’s not waste this opportunity to secure the benefits for millions of members.
Change is coming. The roadmap is clear. The time to act, is now.
Thank you.
