TPR vows to become more assertive
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UK pensions are now “a concentrated, commercialised marketplace of complex financial institutions”, the chief executive of the Pensions Regulator has said, requiring it to be more proactive and assertive.
Nausicaa Delfas made the comments speaking at the JP Morgan Pensions and Savings Symposium on Tuesday, where she also said that “disclosure is here to stay”.
Consolidation drive brings concentration risks
Delfas said more than half of schemes with more than £5m in assets use a professional trustee from one of just 13 different firms.
“A few professional trustee firms have become firmly part of the fabric of pensions,” she said. “And whilst these firms bring expertise, the number of independently minded people making decisions for savers has decreased massively.”
She said today’s was “a very different environment” from that of a few decades ago, where a pension was provided by the employer and overseen by the finance director.
“It is instead, a concentrated, commercialised marketplace of complex financial institutions”, with “supersized schemes across both DB and DC”.
This more concentrated, more commercial and system-relevant environment of competing pension funds and trustee firms means TPR will become “more proactive and assertive”, she said.
TPR will use disclosure to challenge trustees
Delfas also talked about new disclosure requirements, such as Taskforce on Climate-related Financial Disclosures, and the upcoming funding and investment strategy statements for defined benefit schemes.
Noting that some did not see disclosure as the best approach, she was clear that “disclosure is here to stay” and said it should not be seen as a burden but an opportunity.
“As a regulator we will increasingly use that disclosure and constructively challenge trustee decision-making so that savers’ interests are really being met,” she added, arguing that disclosure was there to encourage change.
Delfas also reinforced the government’s message that buyout is not the only way, pointing to a potential supply and demand gap and new options emerging such as superfunds and capital-backed journey planning.
