TPR targets prudential regulatory approach amid consolidating pensions sector

Speaking at DG Publishing’s Private and Public Pensions Summit yesterday (27 November), TPR’s chief executive Nausicaa Delfas told delegates that, even without the government’s consolidation agenda, the largest master trusts in the pensions market stood to become “systemically important” within the next decade.

TPR estimates that seven defined contribution (DC) master trusts will have more than £50 billion in assets in 10 years’ time, four of which could have more than £100 billion.

“We are shifting to a more prudential style of regulation, addressing risks not just at an individual scheme level, but also those risks that impact the wider financial ecosystem,” Delfas said.

“We are entering a different era of regulation which protects, enhances and innovates in savers’ interests, so that all savers – from every walk of life – can get good retirement outcomes from pensions.”

She also highlighted the regulator’s continuing work with pension scheme administrators and professional trustee firms as they too became more systemically important to the success of the pensions industry.

Data quality and pensions dashboards
Delfas highlighted data quality as one of TPR’s core focuses. The regulator has launched a new data and digital policy aimed at gathering more data to inform its work – but also to do so in a way that does not create burdensome requirements for pension schemes.

“It is not just in savers’ interests that schemes have data that they can trust – there are solid business cases for all schemes to make the transition towards validated secure and open standards of data,” she said.

Data was particularly crucial to the success of dashboards, Delfas indicated. TPR will write to pension schemes “several times” in the year leading up to their dashboard connection date explaining the expectations and requirements.

“Schemes must not assume that their administrator has this handled,” Delfas said. “Trustees are accountable and we expect you to keep track of progress, manage risks and keep records of what you are doing to make sure you comply.

“I’d urge you not to think of dashboards only as a burden, but also an exciting opportunity for innovation if we get this right.”

She said TPR would be “as transparent as possible” regarding its expectations on schemes for compliance with the dashboards regulations, but added that pension schemes should not be surprised if the regulator steps in if trustees “choose not to act”.