For many schemes, trustees and employers, the only interaction they have with the Pensions Regulator (“TPR”) is the occasional communication about automatic enrolment, submission of a yearly scheme return and an annual chair’s statement (for the trustees of defined contribution (“DC”) trust-based schemes), however that may be about to change.
On Monday 17 September 2018 TPR published details about its new operating model by which it plans to drive up standards and tackle risk by “engaging proactively with a larger proportion of the schemes and employers we regulate”.
Depending on the level of risk TPR identifies, it expects around 20-40% of the 9,500 defined benefit (“DB”) and DC trust-based schemes it regulates will be subject to “supervisory interaction”. There will be a broad range of regulatory interventions ranging from campaigns to drive up standards of compliance to requesting information through regular meetings and monitoring. TPR’s Chief Executive Lesley Titcomb said: “Schemes across all sectors, whatever their size, can expect the volume and frequency of their interactions with us to increase so that potential risks to pension savers are identified early and put right before it becomes necessary for us to use the full force or our enforcement powers.”
From this autumn, dedicated, one-to-one supervision will be introduced for 25 of the biggest DC, DB and public service pension schemes, with this approach being rolled out to more than 60 schemes over the next year. TPR will maintain ongoing contact with these schemes and in some cases their sponsoring employers, reflecting their size and strategic importance within the pensions landscape.
The increasing regulatory activity is likely to be particularly noticeable to those involved with DC trust-based schemes, as to date TPR has given little attention to these schemes.