A new strategy to drive up standards of trusteeship will be launched by TPR. In a keynote speech, Chief Executive Nausicaa Delfas said the strategy would bring trusteeship into line with other professions and corporate governance standards.
She told delegates at the PMI annual conference that trustees need to ensure they are ready for the 'transformational impact' of the Pension Schemes Bill.
She said: “Trustees lie at the heart of the pensions system. The decisions they take have enormous impact on the financial wellbeing of millions of savers. And as the system grows and evolves, so must the nature of trusteeship. What worked in the past, may not work for the future.”
Traits Ms Delfas set out are that trustees are:
• saver outcome-focused
• capable of constructively challenging to avoid group think
• highly skilled and diligent
• agile and responsive
• collaborative but accountable
• data-led
Not re-inventing the wheel but learning from others
TPR will look to other financial services regimes and corporate reporting standards – like UK Corporate Governance Code – to make sure that trustees have the time and independence to challenge group think. Ms Delfas said: “What does a changing pensions landscape mean for trustees?
“Frankly, in a world of mega funds and superfunds we must re-evaluate how the role can best serve savers. We don’t need to re-invent the wheel: after all, pensions are operating in a mature financial system. But with responsibility for the financial wellbeing of millions of people in the UK, trusteeship needs to come into line with other professions and corporate governance standards. Learning from others and applying the best of analogous regimes within our own regulatory sphere of influence must be the goal.”
Reducing burden
At the same time as raising standards, TPR wants to make sure that regulations deliver better outcomes. Ms Delfas told the conference that TPR is actively looking at how it can reduce any unnecessary regulatory load. She said TPR’s defined benefit (DB) funding code had already set out a new shift in its approach, with an expectation that around 80% of DB schemes will be able to meet the code’s Fast Track approach, resulting in less contact from TPR and lower regulatory burden on schemes through simpler reporting.
She said: “Over the coming year we will also conduct a broad review of our scheme return and supervisory returns, to rationalise and remove asks of you which aren’t directly related to good saver outcomes. To focus our activity on where the greatest risk lies and let you focus on the task at hand – delivering for savers. Because, ultimately, protecting and providing for savers is why we are all here.”
She concluded: “To meet their needs, and the requirements of today’s Pension Scheme Bill we will all have to adapt and evolve. It is an incredibly exciting time for the industry. A time in which we must rethink what it means to be a trustee, an administrator and even a regulator.”
• Read the PMI speech
• TPR today welcomed the Pension Schemes Bill.
• The Pensions Regulator is the regulator of work-based pension schemes in the UK. It protects savers’ money, helps to enhance the pensions market and supports innovation in the interests of savers. Its statutory objectives are to:
o protect members’ benefits
o reduce the risk of calls on the Pension Protection Fund (PPF)
o promote, and to improve understanding of, the good administration of work-based pension schemes
o maximise employer compliance with automatic enrolment duties
o minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only)
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