TPR's strategic priorities are set out below, some highlights from which are that TPR will:
- Use the Millenials/Baby Boomers/Generation X cohorts as part of their diagnostic tools and when setting their approach. I agree this makes sense- whilst flexibility in that approach will be important including taking into account additional factors including gender, and socio-economic background.
- TPR will drive consolidation where this is in savers’ interest - We see this steer re consolidation as helpful for clarity for the years ahead. We support this, whilst, a key issue will be what is in the best interests of members and a close review of the benefits and potential impact of consolidations. The Irish regulator recently published a note of concern that some consolidation can come with a potential weakening of how fiducairy duties are exercised in practice. I see this as key, as the size of schemes increase, the need to focus on member interests must be maintained. On this- good trusteeship will be key to support members,
- Increase its focus on managing savers’ exposure to economic risks, including environmental, social, and governance risks and that money is suitably invested. Again we support this view, whilst noting that it highlights the perennial question as to the extent to which managing risk may give rise to a reduction in member options and also may result in the de facto giving of advice. TPR in its statement below in respect of decision making comments that "Our work will also continue with other regulators and providers to improve savers’ access to helpful information, guidance and, where appropriate, advice." We believe that continued work across the industry to consider the issues of balancing risk versus choice and and return will be increasingly important.
I have highlighted these and some other points of note from TPR's extract below, including the emphasis on a preventative approach where TPR will have a "sharp focus on..preventing issues before they materialise".
Strategic goal: Savers’ money is secure
Our primary goal is to protect the money that savers invest in pensions. We will work to ensure that DB schemes are funded to meet the promises made to savers and that, where necessary, savers can continue to rely on the security provided by the Pension Protection Fund. We will drive consolidation where this is in savers’ interests and better protects their money. We expect the payment of contributions into schemes to be prompt and accurate and we will intervene quickly where this does not happen. We will work with our partners to protect savers from scammers and to tackle cyber-enabled risks. As assets in DC schemes grow over the 15-year horizon of this strategy, ensuring the security of savings in these schemes will also be a key focus.
Value for money
Strategic goal: Savers get good value for their money
Pension savers are entitled to expect good value for their money. This means that savers’ money must be suitably invested, costs and charges must be reasonable, and good quality, efficient services and administration are driven by robust data. We will work with our regulatory partners and industry to establish common standards on value for money, setting clear expectations and sharing good practice. We will actively pursue value for money throughout the pensions system and intervene where our expectations are not met. Where consolidation occurs, we expect it to deliver improvements in the value of savers’ outcomes.
Scrutiny of decision-making
Strategic goal: Decisions made on behalf of savers are in their best interests
Savers’ outcomes are greatly influenced by the decisions that others make on their behalf. We will monitor those who make these decisions, across all scheme types, scrutinising any that pose a heightened risk to the quality of outcomes. We will increase our focus on managing savers’ exposure to economic risks, including environmental, social, and governance risks. We expect decisions that affect savers to be fair and transparent and will encourage diversity among those who take decisions on behalf of savers. Where we believe poor decisions may lead to bad outcomes for savers, we will intervene. We will explore issues relating to the decisions employers make on behalf of savers, including the selection of pension products and the support they feel able to offer to assist savers’ decision-making. Our work will also continue with other regulators and providers to improve savers’ access to helpful information, guidance and, where appropriate, advice.
Embracing innovation
Strategic goal: The market innovates to meet savers’ needs
The market should meet and keep pace with savers’ needs. We will encourage innovation, facilitating the development of technology and sharing of good practice, and collaborating with the market to encourage security, efficiency, transparency, simplicity and choice. Our focus on innovation includes emerging scheme models: we will work with the market on the development of DB alternatives to ‘traditional’ schemes as well as on the development of decumulation products in DC trusts and the establishment of Collective Defined Contribution schemes. We expect extensive, continuing change in the pensions marketplace and as we evolve we will balance our resources to intervene where we can have the greatest impact on saver outcomes.
Bold and effective regulation
Strategic goal: TPR is a bold and effective regulator
We will transform the way we regulate to put the saver at the heart of our work, driving participation in pensions saving and focusing on the value and security that pensions provide. We will remain a key part of a coherent regulatory system, working closely with others and taking opportunities to align regulation and minimise burden, adopting a principles-based approach where this is appropriate. We will identify and share good practice, setting clear expectations for those we regulate. Where our expectations are not met, we will act quickly and be tough where we need to be. Our approach will be proportionate to the challenges we face, and we will demonstrate our own effectiveness and value. Throughout our evolution we will maintain a sharp focus on bold and innovative regulation, anticipating and preventing issues before they materialise. We will continue to adapt to a changing world, flexing our approach to the opportunities and constraints of the time, working with our partners and industry to deliver on our commitment to pension savers.
Different groups of pension saver face distinct challenges in meeting their needs today and making provision for tomorrow. To put the saver at the heart of our work, our strategy-setting process has been grounded in an analysis of pension savers: their needs, the challenges they face, and how the changing landscape may shape their financial futures.